Logistic A

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Defining maritime logistics hub and itsimplication for container portHyung-Sik Nam a & Dong-Wook Song aa Logistics Research Centre, Heriot-Watt University, EdinburghEH14 4AS, UKVersion of record first published: 09 Jun 2011.

To cite this article: Hyung-Sik Nam & Dong-Wook Song (2011): Defining maritime logistics huband its implication for container port, Maritime Policy & Management: The flagship journal ofinternational shipping and port research, 38:3, 269-292

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MARIT. POL. MGMT., MAY 2011,VOL. 38, NO. 3, 269–292

Defining maritime logistics hub and its implicationfor container port

HYUNG-SIK NAM and DONG-WOOK SONG*

Logistics Research Centre, Heriot-Watt University,Edinburgh EH14 4AS, UK

Since the hub-and-spoke concept was introduced to the aviation market after theUS airline deregulation in the late 1970s, it becomes a primary distribution modelemployed by leading international logistics companies. This pattern drives thecompanies to consolidate shipments on the large scale at major terminals (i.e.hub) and to redistribute the smaller scale of shipments to their respectivedestinations via radial links (i.e. spoke). In the field of logistics and supply chains,however, the hub concept has been often introduced in various terms inaccordance with functionality: for example, logistics centre, logistics zone, freightterminal, distribution centre and warehouse. Such a heterogeneous terminologyon the concept of logistics hub seems still in usage by practitioners and academicsalike. Having recognised this rather ambiguous concept and definition in theliterature, this article attempts to define the concept applicable to the maritimeindustry by synthesising existing studies/perspectives and examine its possibleimplications.

1. Introduction

Logistics has become a significant area of interest in global business andmanagement, and is seen as a way to enhance firms’ performance and outcomes[1]. The importance of logistics has dramatically increased, as evidenced by thesignificant degree of attention paid to it by practitioners and academics alike, due inlarge part to the internal and external environmental factors affecting firms, such asglobalisation, changing customer demands, advances in technology and industrialderegulation. Logistics centre (or so-called logistics hub or distribution centre) wasintroduced in early 1980. Initially, the function of logistics centre was mealy limitedin simple warehouse which store the fished goods. However, modern logistics centreprovides a wide range of services including sophisticated and comprehensive value-adding services. In the field of logistics and supply chains, however, the hub concepthas been often introduced in various terms in accordance with functionality: forexample, logistics centre, logistics zone, freight terminal, distribution centre andwarehouse. Such a heterogeneous terminology on the concept of logistics hub seemsstill in usage by practioners and academics alike.

Having recognised this rather ambiguous concept and definition in the literature,the main purpose of this article is to critically review the concepts and definitions

*To whom correspondence should be addressed. E-mail: [email protected]

Maritime Policy & Management ISSN 0308–8839 print/ISSN 1464–5254 online � 2011 Taylor & Francishttp://www.tandf.co.uk/journals

DOI: 10.1080/03088839.2011.572705

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associated with the existing hub literature applicable to maritime transport andlogistics by synthesising the existing studies and perspectives. As Webster andWatson [2] and Lewis and Grimes [3] claim; an effective review creates a foundationfor advancing knowledge, closes areas where a plethora of research exists anduncovers areas where research is needed. In this sense, this article also makes afurther proposition that hub ports (in particular, container ports) should beexamined with not only their container throughputs in terms of Twenty-FootEquivalent Units (TEU) but also their connections with shipping lines in the inter-and intra-region. It is therefore addressed that an applicability of network-basedanalyses would be made in the context of maritime logistics hub.

2. Logistics hub in concept

2.1. Defining logisticsSince a logistics concept was introduced in the early 1960s, the role of logistics, as amain centre for firm’s cost reduction and consequently gaining its competitivemarket position, has been ever more important to the business world [4]. As Stroh [5]indicates, the term of logistics deriving from military that often refers to themanagement of troops’ movement (i.e. equipments and supplies from one location toanother). After this military term ‘logistics’ was introduced in the field ofmanagement, it has been defined mostly as to manage the movement of productsor items in business environment.

The term of logistics is often used to imply a number of different aspects of itsrelated functions, such as physical distribution, materials management, procurementand supply and supply chain management. Growing interests in logistics have beenmainly due to the fact that logistics is one of the very few areas being utilised toestablish substantial economies. The logistics concept provided by the Council ofSupply Chain Management Professionals [6] is one of the most popular, wherelogistics is defined as part of supply chain management that plans, implements andcontrols the efficient, effective forward and reverse flow and storage of goods,services and related information between the point of origin and the point ofconsumption in order to meet customers’ requirements. This definition implies all therelevant activities of the flow of goods from the origin to ultimate destination,including transportation, warehousing, purchasing, distribution, etc.

As an important business function, logistics has drawn attention of businessoperators as well as academic and scholars. Logistics has been a frequently studiedarea, and a great number of studies and discussions have contributed enormously tothe overall development of logistics. There are several authors who make an effort todefine the logistics concept based on their own views. The generic strategyframework by Porter [7] proposes that cost readership and differentiation are thetwo main sources of competitive advantage. Stock and Lambert [8] identify thatlogistics can be used as an offensive weapon for firms to gain a differentiation andcreate a sustainable competitive advantage. David and Stewart [9] view logistics aspart of the supply chain process that plans, implements and controls the effectiveforward and reverse flow and storage of goods, services and related informationfrom the point of origin to the point of consumption. An emphasis of logisticsfunctions differ from authors to authors. Rushton et al. [4] address that logisticsshould be characterised by both ‘material management and distribution’, whileAgapio et al. [10] claim that ‘transport and distribution’ are cornerstones of logistics

270 H.-S. Nam and D.-W. Song

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and its most visible manifestations. Logistics has traditionally been viewed first and

foremost as the physical distribution brought about by a focus on transportation and

warehousing [11], and is often regarded as the ‘whole process in managing the flow of

goods, services and information flow from raw materials to final customers’ [12].

Baudin’s [13] definition also encompasses all the relevant activities associated with

the flow of goods, including the functions of transportation, warehousing,

purchasing, distribution and so on. Christopher [14] employs a marketing and

cost-effective oriented approach, which highlights that logistics is a planning

framework with marketing channels to create a single plan for the flow of products

and information.Coyle et al. [15] provide three major stages in terms of logistics developments. The

first stage is in 1960s to 1970s when logistics was considered as mere physical

movement of goods. There existed recognition on relationships between the various

functions within logistics, and companies recognising the change in the structure and

control over their distribution chain. Large retailers developed their own distribution

structures, which were based on the concept of regional or local distribution depots

to supply their stores. Moving to late 1980s and 1990s, the second stage is linked to

implementation of information technology concept [16] and integration of individual

logistics functions in that logistics was regarded as materials management (i.e.

inbound logistics) with physical distribution (i.e. outbound logistics). Finally, the

third stage of logistics development took place in 2000 and beyond. Companies

experienced a number of business challenges in order to maintain or improve their

competitiveness against competitors. During this period, there was a positive value

added role of logistics, while the traditional view of logistics being treated as merely a

cost burden became a minor viewpoint, regardless of any other implication.

Brief processes and related activities of logistics can be summarised as presented

in Figure 1.

Management actions

Planning ControlImplementation

Logistics Management

Rawmaterials

In-processinventory

Finished goodsS

upplie

rs

Custo

mers

Inputs into logistics

Outputs from logistics

Natural resources

(land, facilitiesand equipment)

Marketingorientation

(competitiveadvantage)

Human resources

Time and place utility

Efficient movement to

customer

Financialresources

Information resources

Proprietaryasset

Logistics activities

•Customer services•Demand forecasting•Distribution communications•Inventory control•Material handling•Order processing•Parts and service support

•Plant and warehouse site selection•Procurement•Packaging•Return goods handling•Salvage and scrap disposal•Traffic and transportation•Warehousing and storage

Figure 1. Components of logistics management.

Defining maritime logistics hub and its implication for container port 271

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2.2. Defining logistics hubThe development of international trade and industrial distribution patterns has beenimpacts on the development of logistics facilities as they have been recognised a mainstrategic contributor to achieving competitiveness and attractiveness [17]. There hasbeen no clean cut definition towards what a logistics hub is. A dictionary [18] definesthe term ‘hub’ as a central part of vehicle’s wheel and exchangeable with ‘centre’. Thehub is commonly used in the aviation (especially, passenger sector) industry after theUS airline Deregulation Act in 1978; the route structure has been since then adoptedby a large number of airlines that operate in the deregulated market. A hub isstrategically located at an airport utilised as a collection–distribution centre forpassengers serviced generally by a single carrier [19]. Since the Deregulation Acteliminated routing restrictions, networks based on a hub-and-spoke architecturehave proliferated in the US freight transportation industry as well. In the period of1990s, the hub concept became the primary distribution model employed by logisticsintegrators such as DHL, TNT, UPS and FedEx and leading international carriers.Shipments coming from several origins are consolidated at major terminals (i.e. hub)and redirected to their respective destinations through radial links (i.e. spoke) [19].The hub concept has been often introduced in various terms in accordance withmainly its functionality of storage and transportation: for example, logistics centre,logistics zone, freight terminal, distribution centre, warehouse, intermodalterminal international transport terminal, intermodal terminal and so on. Such aheterogeneous terminology on the concept of logistics hub seems still in usage bypractioners and academics alike.

According to Rimiene and Grundey [20], the ‘logistics facilities’ (so-called logisticscentre) concept appeared around 30 years ago and can be classified into threedifferent generations over the course of its evolution. Europlatforms [21] provides aprecise definition of logistics centre that the hub for a specific area where all theactivities relating to transport, logistics and good distribution, both for national andinternational transit, are carried out, on a commercial basis, by various operators.Johnson and Wood [22] views logistics centre as cost reduction centre which isdefined as a facility where commodities move constantly to the end of circulation andthe warehousing amount and relevant costs are reduced as much as possible. An UNreport [23] states that a logistics centre should be able to equipped with all the publicfacilities necessary to carrying out the all logistics related activities. Logistics centresserve a variety of purposes including cargo transhipment, production synchronisa-tion, facilitating business and trade, whereas others aiming to strengthen the logisticscapability for transforming a region a more attractive or competitive market.However, the fundamental requirements as per logistics centre are on nodal point oftransport network, common infrastructures, intermodality and logistics and trans-port services [24].

Over time there have been changes to how things are stored, produced and moved,which have been significant for the development. The logistics facilities conceptcould be, however, derived from three different perspectives such as a ‘traditionallogistics and supply chain management’ perspective (i.e. distribution centre orwarehousing), a ‘freight transport’ perspective (i.e. load centre, freight village andtransport node point) and a ‘Foreign Direct Investment’ (FDI) perspective (i.e.international logistics zone and international free trade zone). Rimiene and Grundey[20] provide three stages of developments of logistics facilities: (i) 1960s–1970s,(ii) 1980s-early 1990s and (iii) mid 1990s-present, respectively. At the first stage,


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logistics facilities are viewed as a mere warehouse that is understood as a physicallocation for inventory, and have no direct linkage with production. Relevantreferences, terms and highlights are summarised in Table 1.

Bowersox [25] defines ‘distribution centre’ as a physical facility used to completethe process of product line adjustment in the exchange channel, and its primaryfunction is placed upon product flow in contrast to storage However, Reynaud andGouvernal [29] expand its simple warehousing function into transportation that isdefined as a place where consignments from different origins are grouped or split,and is above all a transportation organisational centre, located at nodal point in thelogistics system. At the second stage of development, they are engaged withadditional outbound transportation functions [16] and often called to be a ‘transportterminal’ and a ‘freight village’. Freight village is a defined area within which allactivities relating to transport, logistics and distribution of goods, both for nationaland international transit, are carried out by various operators [20]. It is claimed that,there are four requirements for being a freight village – that is, (i) it must allow toaccess to all companies involved in the logistics activities in order to comply with freecompetition rules, (ii) it must be equipped with all the public facilities including staffsand equipment, (iii) it should preferably be served by a multiplicity of transportmodes (i.e. intermodal transportation) and (iv) it is imperative that a freight villagebe run by a single body, either public or private [21]. Logistics facilities at the laststage have become a supplicated logistics node, which offers value-added servicesand a point where diverse routes converge to [30]. UN [23] identifies determinantfactors that can be a successful logistics centre as follows:

. A community desire to have a comprehensive hub development strategy,

. Existence of comparative cost advantages,

. A favourable fiscal environment,

. Existing high-tech manufacturing industry base,

. One-stop-shop local marketing organisation that proactively promotes thelocation,

. Supporting infrastructure at all transport terminal facilities and humanresources and

. Appropriate incentive packages for foreign investors.

3. Maritime logistics hub in perspective

3.1. Defining maritime logisticsHaving the aforementioned definitions on logistics in mind, maritime logistics isconcerned with maritime transport (i.e. shipping and ports), traditional logisticsfunctions (e.g. storage, warehousing, offering distribution centre services) andintegrated logistics activities (e.g. value-added services including labelling, assembly,repairing). Despite the fact that there have been a large number of attempts toinvestigate the convergent role between maritime transportation and global logistics[11, 12, 31], the term maritime logistics has not yet been clearly addressed. Panayides[32] initially introduces the concept of maritime logistics within the context of globalsupply chains, but the definition and other related attributes such as scope, processand characteristics of the concept have not been fully examined in his study. In thisrespect, this article makes an effort to fill in the literature gap by defining themaritime logistics based on the literatures of logistics and maritime transportation.


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Table

1.

Perspectivesonlogistics

centre/hub.

Perspectives

Types

ofhub

Key

points

References

Traditional

logistics

and

supply

chain

perspective

Distribution

centre/warehouse

�Place

foraphysicalfacility

usedto

complete

theprocedure

forthe

product

lineadjustmentin

theexchangechannel.

[4,19,20,22,25,26]

�Warehouse

forstoringfinished

goods.

�Facility

from

whichwholesale

andretailorderscanbefilled.

�Place

whereconsignments

from

differentoriginsare

grouped

and/orsplit.

�Controltheproduct

flow

incontrast

tostorage.

�Place

forcreatingvalue-added

services.

�Connectinglinkbetweenproducerandcustomer.

Freight

transport

perspective

Freightvillage/

logistics

node

�Place

fortransport,logistics

andgoodsdistributionfunctionality.

[21,24]

�Providegeographic

coverage.

�Facilities

whichincludewarehouse

andstoragearea.

�Provideforpublicserviceandfullterritory

access.

Freightterm

inal

�A

term

inalforfreighttransport

modes

change.

[24,27]

�Provideaserviceforhandlingoperation.

�Place

forvalue-added

services.

Dry

port

�Inlandlocationforconsolidationanddistributionofgoods.

[27,28]

�Anintegratedandinterm

odalextensionofports.

FDI/international

facility

location

perspectives

International

logistics

zone

(orinternational

free

tradezone)

�Partsoftheterritory

ofastate

whereanygoodsintroducedare

generallyregarded,in

sofarasim

portduties

andtaxed

are

exem

pted.

[29,30]

�Space

foran

arrangem

entwheredifferenttradingentities,usually

mem

ber

countries,

agreeto

cutorscrap

taxed

inorder

tolower

businesscostsandremovebureaucracy.

Source:

Compiled

bytheauthors.


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Maritime logistics is often referred to as a process of planning, implementing andmanaging the movement of goods and information with ocean carriage beinginvolved. It has, in particular, highlighted the role of maritime transportation inglobal logistics and supply chains [33], and its strategically significant role within thelogistics integration system [11]. However, as Notteboom [34] indicates, maritimelogistics is concerned with individual functions relating to sea transportation as wellas an effective logistics flow as a systematic entity of the logistics integration system.

Maritime logistics consists of three key players of maritime transportation –shipping companies, port operators and freight forwarders. Although shipping ismainly concerned with moving goods from one port to another, it also providesrelated logistics services in order to support an overall logistics flow, including pick-up services, inbound/outbound bills of lading, intermodal services and containertracking. Ports in modern logistics systems involve not only loading/off-loadingcargoes to/from a vessel, but also various value adding services includingwarehousing, storage and packing and arranging inland transportation modes.Freight forwarding as the third component of the whole maritime logistics systems,encapsulates the process of sea transportation in order to arrange the complexprocess of international trade such as booking vessels on behalf of shippers,preparing documents for ocean carriage and arranging logistics services for theshippers. Figure 2 illustrates those elements in relation to the traditional logisticsfunctions.

Over the past decade, the maritime industry has experienced a number ofchallenges occurred mainly due to changes in trade patterns, deployment of largervessels, regional competition among shipping lines and ports and intermodality.Because of cost and capacity advantages, maritime transportation has alwaysremained a primary choice in global trading. As of 2007, seaborne trade accountedfor approximately 90% of global trade in terms of volume and 70% in terms of value[35]. The liner shipping industry is the major contributor to this significance to theworld economy as it accounts for over 70% of total trade value shipped by sea [36].A substantial volume of containers are delivered every day through its fast, frequentand reliable transport network to almost any destination worldwide. The develop-ment of the liner shipping industry has been accelerated through the process ofglobalisation. The total volume of international container trade reached 117.2million TEUs in 2006, more than twice that of 1999. In order to cope with thisincreasing demand for container transportation, the total capacity of liner shippingservices was increased from 4.7 million TEUs in 1999 to 10.8 million TEUs in 2006,an average annual growth rate of 8.7% [37].

Having been affected by the growth of containerisation traffic, shipping lines nowcompete to acquire vessel sizes as large as they can, in order to gain the advantages ofeconomies of scale while also attracting the interest of powerful shippers with a largeamount of products to be shipped [31]. This movement redefines the geographicalstructure of sea transport. Huge vessels now make it possible for only a few ports(e.g. hub ports) to accommodate them, leading to the division of container ports intohub and feeder ports. Under these conditions, an imbalance of power tipped infavour of the shipping lines and the added capability of dealing with huge amount ofcargo has posed a new threat to both small-sized shipping lines and port terminaloperators.

Most shippers traditionally arrange two or more forms of transport modes inorder to ensure that their goods are efficiently delivered to their final destination.


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Dem

and

fore

cast

ing

Pur

chas

ing

Req

uire

men

ts p

lann

ing

Pro

duct

ion

plan

ning

Man

ufac

turin

g in

vent

ory

War

ehou

sing

Mat

eria

ls h

andl

ing

Indu

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l pac

kagi

ng

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ishe

d go

ods

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ntor

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rtat

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ervi

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ls m

anag

emen

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ysic

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istr

ibu

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itim

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itim

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Figure

2.

Maritimelogistics

inperspective.


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Maritime transportation is an inter-mediate mode which connects other modes oftransport such as road, rail, air and sea. In order to offer a single transport packageservice and achieve quick door-to-door delivery, maritime operators are forced toamalgamate all possible transportation modes and to coordinate with other modes oftransport [38]. Song [39] points out that ports should ensure that cargoes aresmoothly and safely connected to road or rail modes to facilitate delivery to theirfinal destination. Nowadays, it is crucial for maritime operators to combine theintricately connected intermodal systems in an efficient and reliable manner, since itmay affect the performance of logistics integration.

As far as the scope of managerial functions are concerned, maritime logisticsinvolves not only the activities relating to maritime transportation, e.g. contracting,shipping, sea voyage, moving cargo, loading/unloading, but also other logisticsservices, e.g. stripping/stuffing, storage, warehousing, inventory management,offering a distribution centre, quality control, testing, assembly, packaging,repacking, repairing, inland connection and re-use. There are broadly three majortrends in logistics in the maritime industry [35, 40] including firms’ pursuingglobalisation, shift in supply chains and logistics integration and consolidation in thelogistics service provider industry One of the main driving forces for change in theport industry emerges from the globalisation of production. Multinational enter-prises are the key drivers of global production networks and associated distributionnetworks. As a result of changing business environments (such as globalisation andexpansion into new markets, mass customisation in response to product and marketsegmentation, and lean manufacturing practice), service expectation of customershave moved towards a push for higher flexibility, reliability and precision [41]. It hasled to increasing the number of products to be shipped and the shipment frequency,and decreasing average product life cycles and supply chain cycle.

The integrating of supply chain processes (including customer order management,procurement, production planning, distribution, etc.) to enhance performancetypically results in collaborative networks with logistics partners. Firms haveacknowledged that warehousing and transportation are not part of their corebusiness and as a result these operations are outsourced to logistics service providers(either third or fourth party). Increasing degree of firms’ globalisation pursuit andoutsourcing have provided opportunities for shipping companies, forwardingcompanies, terminal operators and other transport operators. As manufacturingfirms have been looking for global logistics packages rather than just straightshipping or forwarding services, most entities in the transport chain have respondedby providing new value-added service in an integrated package throughout a verticalintegration along the supply chain. The vertical integration has created mega-carrierthrough merger and acquisitions. Mergers and acquisitions have occurred not onlydriven by companies searching for takeover candidates, but also by companies whichhave decided to divest aspects of their business, and were consequently looking forbuyers of these business [42].

Among the three key components of maritime logistics (i.e. shipping lines, portauthorities and freight forwarders), both shipping lines and port authorities are themain players in the field of maritime logistics, although freight forwarders, oftencalled international trade specialists, are a key players in the middle to facilitatecross-border trade. Liner companies operate regular, reliable and frequent services,but they incur high fixed costs. Once the large and expensive shipping networks areset up, the pressure is on to fill them with freight. In the 1990s, great attention was


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devoted to larger and more fuel-economic vessels, and these indeed producedsubstantial reductions in cost per TEU of capacity provided [43]. Larger ships haveoften have a lower cost per TEU-mile than smaller units with the same load factor[44, 45]. Table 2 shows the increasing scale of vessel size (in terms of percentage oftotal shares) during the period of 1991 to 2006. Since late 1990s, there have beenthree main integrations in shipping lines including trade agreement (i.e. linerconference), operating agreement (i.e. vessel sharing agreement and strategicalliances) and mergers and acquisitions [41].

Traditional function of ports has been limited for transhipment in order totransfer goods from one mode of transport (shipping) to another (either anothermaritime transport or inland transport) [47]. At present, however, ports play animportant role in the management and coordination of materials and information, asthe transport is an integral part of the entire supply chain. In order to developmaritime transport as an integrated logistics system, ports have to simultaneouslywork in several directions, by taking into account the requirements of the sendersand receiver of goods (such as physical accessibility from land and systematicorganisation of the information flow, which are regarded to the choice of seaport) asthey become their business partners in addition to the traditional ones (such asshipping companies, terminal operators and forwarding companies). Chen [48]pointed out that the main contribution of modern ports depend upon: theavailability of efficient infrastructure and inland connections, as part of a globaltransport system; and the ability of logistics and transport operators to contribute tothe value creation and to accomplish also the qualitative attributes of customerdemand (such as reliability, frequency, availability of information, security, etc.).

As Notteboom and Rodrigue [12] indicate the main roles of traditional seaportshave been viewed as areas made up of infra- and super-structure capable of receivingships (such as pilotage and towing) and other modes of transport, and handling theircargo from ship to shore and vice-versa (i.e. stevedoring that facilitates the loadingand uploading of cargoes). At present, however, ports play an important role in themanagement and coordination of materials and information, as the transport is anintegral part of the entire supply chain [47], and as the importance of port’scapability of providing logistics services (i.e. creation of value-added service) ishighlighted [49].

Among a number of logistics value-added service (such as consolidation,packaging, labelling, assembly, economic processing, contingency protectionand operation efficiency), the importance of port’s value-added service is varied

Table 2. Increasing scale of vessel size.

1991 1996 2001 2006

45000 TEU 0 1.0 12.7 30.04000–4999 TEU 7.5 14.4 15.6 17.13000–3999 TEU 17.6 20.6 16.6 11.42000–2999 TEU 29.0 22.6 20.5 17.71000–1999 TEU 30.5 28.4 23.9 16.851000 TEU 15.3 12.9 10.7 7.1

Note: Figure indicates percentage of total fleets. Unit: %.Source: [46].


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by different authors. Carbone and De Martino [47] indicate procurement and pre-assembly service are becoming of considerable significance, but Panayides and Song[33] conclude the provision of port facilities for adding value to cargoes is animportant criteria for ports integrated in the supply chain. In order to developmaritime transport as an integrated logistics and supply chain management system,ports have to simultaneously work in several directions, by taking into account therequirements of the senders and receiver of goods (such as physical accessibility fromland and systematic organisation of the information flow, which are regarded to thechoice of seaport) as they become their business partners in addition to thetraditional ones (such as shipping companies, terminal operators and forwardingcompanies). Chen [48] also points out main contribution of modern ports dependupon: the availability of efficient infrastructure and inland connections, as part ofa global transport system; and the ability of logistics and transport operators tocontribute to the value creation and to accomplish also the qualitative attributesof customer demand (such as reliability, frequency, availability of information,security, etc.).

3.2. Defining maritime logistics hub and successful conditionsAs definition of maritime logistics and different perspectives of hub reviewed inSection 3, the functions and spatial features of traditional seaport has been extended,and coordination with other modes of transport and integration to entire supplychains are key issues to attract customers. During the Section 3.2, the concept ofmaritime logistics hub and their successful condition to be a regional hub port arediscussed within the context of the container port.

From the maritime transportation perspective, the load centre concept, assummarised in Table 1, for a containerisation port has been particularly highlightedby several authors including Martin and Roman [50] and Wang and Slack [44]. Thecontainer revolution has provided a technology that was able to produce economiesof scale in the general cargo segment of maritime transport, which have resulted fromthe employment of larger and more efficient vessels, a reduction of both time andcost of port operations and the intermodal integration of ocean shipping withmovements by other transport modes [50]. Seaports have been defined as areas madeup of infra- and super-structures capable of receiving ships and other modes oftransport, handling their cargo from ship to shore and vice-versa [49]. However, thedefinition has been expanded to encompass the provision of logistics services whichcreate value-added [14, 49], and ports constituting a critical link in the supply chainand their level of efficiency, and performance influencing to a large extent, acountry’s competitiveness [17].

Tongzon [51], Lee et al. [52] provide the key factors to be a successful port (andalso a logistics hub, to some extent). They include: strategic location, large capacity ofport area and port facility capability for larger vessel, operational excellence andflexibility and government role (including government support, law/regulation andbuilding free trade zone/free economic zone development). Hub ports should belocated strategically that allows minimum deviation from the trade lanes, andenabling feedering from the ‘spoke’. Having been hugely affected by containerisa-tion, shipping lines now compete to hold vessel size as large as they can, in order togain advantages of economies of scale and attract powerful shippers with a largeamount of products to be shipped [53]. This movement affects the geographicalstructure of sea transport. Larger vessels make it possible for only a few ports


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(e.g. hub ports) to accommodate them, which then cause the division of containerports into hub and feeder ports. These ports must be supply driven, and hencegovernment support or an entrepreneurial drive should be followed. High produc-tivity, turnaround time, equipment to cater the larger vessels are key factors whenshipping line chooses the calling port. Robinson [54] studied the history ofcontainership development and generalised the ports and maritime transportnetwork evolution in the Far East, and concluded that the hub-and-spoke networksin the region will evolve continuously based on their operational cost and efficiency.Operational flexibility must not be undermined. The changing nature of trade resultsin lines needing flexibility, and ports that cannot or refuse to adapt will faceconsequences in the future.

There have been a number of studies concerned with building seaport basedlogistics hub and its integration to the global supply chain network [16, 32, 55]. Theroles of seaports are recognised as main components in determining the competi-tiveness of a nation’s economies, and there is a close relationship betweendevelopment and expansion of seaport and economic growth [45, 55]. Through2000s, the logistics hub concept has particularly developed by transport spatialperspective in Europe, and emphasise that the development of functional special-isation on inland terminals with related logistics activities and the importance ofhinterland [56], which include platformes logistiques in France, Interporto in Italy,freight villages in UK, Guterverkehrzentrum in Germany. These terms are oftencreated within the framework of regional development policies as cooperativeinitiatives by companies, intermodal operators, regional and local authorities, thecentral government and/or the chambers of commerce [12].

Notteboom and Rodrigue [12], Thai [45] and Lee et al. [52] have shown theimportance of a port’s hinterland as a new phase of development. Hinterlands arecategorised into two types: main and competition margin [34]. The fundamental(main) hinterland is the space over which a port has almost the exclusivity forproviding its services. The competition margins are the areas where other ports arein competition. The fundamental hinterland is being challenged by intense portcompetition with a port regionalisation mainly composed competition margins andfew fundamental hinterlands. Notteboom [56] explains four phases of portdevelopment (called as Bird’s model) in terms of level of functional integrationthat setting, expansion, specialisation and regionalisation. The important role ofhinterland could be found in the last phase, of the hinterland reach of the portthrough a number of market strategies and policies linking it more closely to inlandfreight distribution centre. Lee et al. [52] provide three regional patterns ofhinterland concentrations by three geographical areas: North America, WesternEurope and South East Asia. According to their research, current Asian portscharacterise that ports are concentrated in the coastal region and there is relativelylow hinterland coverage.

UN [23] provides three evolutional patterns of port development. Until 1960,ports played a simple role as the junction between sea and inland transportationsystems. At that time, the main activities in the port region were cargo handling andcargo storage, leaving other activities extremely unrepresented. Such a way ofthinking severely influenced related persons in the government and local adminis-tration. Also, it even influenced persons related with the port industry, so it wasconsidered that it was enough to develop and invest in only port facilities, as themain functions of the port were cargo handling, storage and navigation assistance.


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It was for these reasons that important changes in transportation technology wereneglected.

Moving to the next pattern (ports built between 1960 and 1980), ports had asystem comprising government and port authority, so the port service providerscould understand each other and cooperate for mutual interests. The activities inthese ports were expanded ranging from packaging, labelling to physical distribu-tion. A variety of enterprises have also been founded in ports and hinterlands.Compared to first-generation ports, the second-generation ports have a character-istic that freight forwarders and cargo owners had a tighter relationship. We can saythat the second-generation ports had begun to notice the needs of customers, butwhen it came to keeping a long-term relationship with customers, they took a passiveattitude.

From 1980, container transportation has developed quickly, and the newintermodal transport system emerged. The activities of production and transporta-tion have linkage to form an international network. The former services function hasbeen enlarged to include logistics and distribution services. The environmentprotection facilities are becoming more important, so the ports are developing closerrelationships with those in their surrounding neighbourhoods. Compared to the past,today’s port authorities are focusing on efficiency rather than effectiveness. In thethird-generation ports, the needs of customers were analysed in detail and portmarketing has been actively engaged. The late 1980s saw the emergence of majorchanges [12]. Customers began to ask ports to provide a greater variety of services.Providing value-added services is a powerful way for ports to build a sustainablecompetitive advantage. Shippers and port customers are becoming increasinglydemanding. Customers now tend to look at Value-Added Logistics (VAL) services asan integral part of their supply chain. As a result, ports must attempt to satisfy theseneeds by offering differentiated services.

According to hub-and-network development, the container port can be dividedinto three categories: hub port, trunk port and feeder port. Huang et al. [57] pointedout that the main criterion a to be a hub port is not throughput cargo rate buttranshipment cargo rate. They conclude that there are five hub ports in Asia Pacificregion, which are two in Southeast Asia (Tanjung Pelepas, Hong Kong andSingapore) and three in Northeast Asia (i.e. Kaohsiung and Busan) in terms of totalthroughput and transhipment (see Table 3 for more). In 2005, the ratio oftranshipment container and container throughput for these five ports are all over40%. Singapore port handles the highest transhipment volume, 18.79 millions TEU,equivalent to 81% of throughput volume. The second highest is Hong Kong, which

Table 3. The transhipment volume of main ports in Asia-Pacific area in 2005.

Port Region

Totalthroughput

(Million TEU)

Transhipmentestimates

(Million TEU)

Estimatetranshipmentincidence

Singapore Southeast Asia 23.19 18.79 81.0%Hong Kong Southeast Asia 22.60 10.15 44.9%Busan (South Korea) Northeast Asia 11.84 5.18 43.7%Kaohsiung (Taiwan) Northeast Asia 9.47 4.82 50.9%Tanjung Pelepas (Malaysia) Southeast Asia 4.17 4.00 96.0%

Source: [57].


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handles 10.15 millions TEU of transhipment container equivalent to 44.9% ofcontainer throughput. The third is Busan port, the transhipment volume is 5.18million TEU and ratio is 43.7%. The fourth is Kaohsiung port, the transhipmentvolume is 4.82 million TEU and ratio is 50.9%. The fifth is Tanjung Pelepas port, thetranshipment volume is 4 million TEU and ratio is 96%. Although the containerthroughput for Shanghai port and Shenzhen port already over 10 millions TEU, buttheir transhipment volume are only 0.40 millions TEU and 1.30 millions TEU, theratio are lower than 10%. As Huang et al. [57] conclude, it is why Shanghai andShenzhen ports can not be called hub port.

Having the aforementioned discussions in mind, it would propose an operationaldefinition of maritime logistics hub as follows:

A maritime logistics hub is (i) a nodal point of cargo transit or transhipment assuringflawless door-to-door cargo movements, (ii) a principal distribution centre functioning asa temporary storage and sorting and (iii) a place creating and facilitating value-addedservices on the regional and/or international scale.

The above definition could be easily applicable to the regional or internationalcontainer ports, competing to have more shipping lines called at a particular portthat wants to be a maritime logistics hub in the region or on the global by keepingestablishing, extending and sustaining networks for the shipping lines.

3.3. Maritime logistics hub in practicePerspectives on logistics centre/hub have been reviewed in previous studies. Maritimelogistics hub used to locate near the sea in order to provide logistics service formaritime industry. However, as Notteboom and Rodrigue [12] emphasise, theconcept and role of hinterland, its location and functional boundary, have beenexpanded into entire logistics systems. UNESCAP [23] provides three developmentphases of maritime logistics centre: functional division between port and logisticscentre; new integrated port concept due to economic and industrial environmentalchanges and provision of value added-services behind hinterland which can diverseto free trade zone function. As initiated by Lee and Kim [58] and UN [23], the so-called Distripark (for the cases of the Netherland and Singapore) has been arguablythe most advanced and sophisticated maritime logistics hub that provides traditionalseaport functions, together with miscellaneous value adding activities and servicescreated and facilitated within the area. What follows is a brief summary of these twocases.

3.3.1. The Netherlands: European distribution centres. Centralisation of pan-European distribution is a major trend implemented by major American and Asianlogistics operators in Europe. Not only are multinationals reengineering their totalEuropean manufacturing and logistics structure, but also medium-sized enterprisesare setting up their first warehouse in the European market. Centralisation ofEuropean distribution brings many logistical and other advantages to the firmsinvolved, which include reduction of logistics costs, increased sales, improvedcontrol, better product availability, enhanced competitive position, faster marketresponse, etc. as well as economising on workforce and investment. The Netherlandshas three main Distriparks (i.e. Distribution Parks) in Rotterdam port area. ADistripark is a large-scale VAL complex connected directly to container seaports.The main activities in Distriparks are storage, consol/transfer, labelling, testing/


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examination, packaging and distribution. Dutch and foreign logistics serviceproviders in the Netherlands meet the requirement of non-European (mainlyAmerican and Asian) manufactures serving the European market. There has been anincreasing trend towards outsourcing warehousing and distribution activities inEurope. The number of outsourced EDCs has grown tremendously since mid 1990s,especially in the Netherlands. Two-third of American European Distribution Centres(EDCs), 60% of Japanese EDCs, and almost all Taiwanese and Korean EDCs haveoutsourced their distribution services to logistics service providers in Europe. Thismeans that only 30% to 40% of American and Japanese manufacturers operate theirown EDCs themselves in the European Markets. The main advantages ofoutsourcing services to third party logistics service providers in Europe include:

. No capital investments needed and thus, bearing less risks,

. Reduced total logistics costs,

. Flexibility in space and manpower requirements,

. Ability to exploit economies of scale,

. Local firms have insight into logistics planning and

. Multinational companies can concentrate on their core business of marketingand scale.

The Netherlands assist American and Asian firms to strengthen their positionin European market by means of VAL. One out of every three EDCs in theNetherlands implements VAL. Through VAL in EDCs, firms combine logistics andindustrial activities in an international gateway to create country-specific and/orcustomer-specific variation of generic products. The main VAL activities arecustomising/localising generic products, quality control and testing of products. Thebiggest advantages of VAL in EDCs are to reduce the costs and risk of keepingstocks as well as to enable a larger range of products to be offered.

Several international logistics hubs have been established at major Asian andEuropean airports and seaports, which have resulted from both multinational firms’global business strategy, and host countries’ investment to attract foreign firms. Luet al. [26] have provided a summary of recent trend of logistics zones (as a logisticshub in terms of functionality) which provides not only a place for firms to store orhold their raw materials, semi-finished goods or finished goods for varying period oftime, but also many value-added activities (including manufacturing, warehousing,consolidation, packing, labelling processing and distribution). Lu et al. [26]highlighted the function of international distribution centre, which defined as aplace which integrates the operations of manufacturing with land, sea, airtransportation, storage, port and customs operations in order to achieve theefficient distribution of commodities, as part of foreign investment.

3.3.2. Singapore: Asian distribution centres. Singapore has the same position inAsian logistics as the the Netherlands does in Europe. There has been a growingtrend for multinational firms to establish Central Distribution Centres (CDCs) inAsia. Using CDCs, they can meet their own standards of service quality and timelyservice to their own customers. They have better control and could respond morereadily to the needs of the marketplace, with focused distribution from one hubto the surrounding region [53]. Because of the fierce competition in manufacturingand marketing, logistics plays a vital role in gaining a competitive advantage. InSingapore, multinational firms partner with third party logistics service specialists.


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Logistics firms have shifted from providing transportation and warehousing tooffering total integrated logistics solutions. They are able to provide high qualitycustom tailored third party logistics services to Multinational Corporations (MNCshereafter) via their CDCs, most of which are located in a Distripark. As a leadingregional and international logistics hub, the logistics industry accounts for about 7%of Singapore’s Gross Domestic Product (GDP).

Singapore has all necessary infrastructures support, which offers a strategiclocation at the crossroads of major shipping routes linking Indian and PacificOceans. It has world-class seaports and airports, excellent infrastructure, an efficienttelecommunication network, a pro-business environment, intensive use of informa-tion technology, wide ranging business capabilities, as well as a skilled anddisciplined workforce. All of these advantages have attracted a large pool ofmultinational and local companies to Singapore. Singapore has taken advantage ofrapid growing neighbouring economies. Since the Southeast Asian countries haverecorded average annual growth of 7% before the foreign exchange crisis of the late1990s, the strong neighbouring economies have helped Singapore to build a regionaldistribution hub successfully. By mid 2000s, over 500 multinational firms havechosen as their Southeast Asian logistics/distribution hub. The logistics companies,which were over 6000 in Singapore, provide comprehensive services such astransport, forwarding, warehousing and distribution to the multinational firms.

4. Implication for container ports

4.1. Northeast Asia as a caseThis section makes an application of what has been discussed to the regionalcontainer ports with particular reference to the Northeast Asia as a case. TheNortheast Asia, composed of China, Japan and two (North and South) Koreas andthe Russian Federation, does not belong to any regional economic block except theAsia-Pacific Economic Cooperation (APEC), which is a sort of consultative regionalforum. During the past two decades, however, the countries in the Northeast haveengaged in a greater degree of economic cooperation. The reform and opening up ofthe Chinese economy since the 1970s have accelerated an economic cooperationin the region, mainly among China, Japan and Korea. China’s accession to WorldTrade Organization (WTO) in 2001 provided a new momentum for regionaleconomic integration by promoting intra-regional trade and accelerating economiccooperation. The Northeast region is an area occupying one-quarter of the worldpopulation, and boasts a total economic size of above US$ 13 trillion [59], and someof the fastest economic growth rates in the world. It is also predicted that these threecountries will have approximately 32% of the market share in global containermovements, accounting for 1360 million TEUs and reap into the centre of the worldeconomy by 2010 [60].

There has been competition being a regional maritime hub port nation in theregion. Until the late 1990s when both Japan and Korea suffered their respectivefinancial and economic crisis, maritime transport has played a key role in promotingtrade between the nations. Based on its competitive labour cost and market size,China has been enjoying 8–11% of economic growth rates every year since the early1990s [61]. China’s economic growth has accompanied development of the nation’smaritime infrastructure and seaports (such as Shanghai and Shenzhen) and China’scargo throughputs was approximately 3.5 times more than Busan port, the main


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seaport in Korea, in 2006 [62]. Rapid growth of Asia’s container seaports and theirmarket position in the 2000s can be seen in Table 4. In addition, total containerthroughput of major container ports in Northeast Asia (with particular reference toJapan, Korea, Singapore, Taiwan and China) since 1970s is illustrated in Figure 3.

As noted by UN [37], the region’s economic opportunity is optimised if anappropriate transport and logistics system is carried out, including adequate portand shipping services in place to facilitate the efficient and effective flow of sea-basedtrade within the region as well as to and form overseas markets. However, there is anincreasing concern that inadequate infrastructure and a lack of harmonised policiesamong the Northeast countries may cause serious bottlenecks in the transport andlogistics system, and ultimately hinder the potential of trade and economicdevelopments of the region. Multilateral maritime cooperation among the threecountries seems essential to the establishment of a common shipping and portsystem. It will also help the maritime transport network evolve into other modes oftransport throughout cross-boarder of different countries such as the projectedTrans-Asian Railway. It is well recognised that seaports are the focal point of globaldistribution and logistics systems and therefore a priority should be given to thebalanced development of the ports in the Northeast. The demand for containerports, and competition and cooperation within the Northeast region will furtherincrease in the future. This trend will heighten competitive pressures on these majorports in Northeast Asia.

Along with rapid trade expansion, manufacturing-dominant economies in EastAsia have created tremendous demand for maritime transport. Because containertransportation has been the most appropriate method for facilitating the efficientmovement of manufactured goods to export markets, there has been a surge indemand for inter- and intra-regional shipping capacity and strong containerhandling performance. Looking back the past 10 years, the development ofNortheast countries’ port can be summarised as remarkable investment on portsby China, while Korea and Japan have experienced economic recession since late1990s. Two main container ports in mainland China (such as Shanghai andShenzhen) ranked world third and fourth highest cargo throughputs whichaccounted for approximately 40 million TEUs in 2006 (The figure is 3.5 timesmore than Busan port in Korea) [63]. Even massive port construction both in Chinaand Korea have often been unable to keep pace with the dramatic increase in theirmaritime traffic. Faced with these problems, countries in the Northeast haveimplemented new approaches to port developments and management, which weretypically funded and managed by government. These new ways include deregulation,improvement of FDI and private sector involvement in ports [64].

The container port industry in China has experienced a rapid expansion duringthe past three decades. Throughput and capacity have been hitting record highs asprogress has been made in port infrastructure, cargo handling facilities andadministrative systems. Meanwhile, a significant amount of investment has beenpoured into the container port industry to support its double-digit growth. As aresult, six of Chinese ports have ranked within the top 20 container ports in 2008.The concentration of throughput is a fundamental characteristic of China’scontainer port industry [65]. Adopting a geographical perspective, they can beorganised into three regions: Northern China (Qingdao, Tianjin and Dalian),Central China (Shanghai and Ningbo) and Southern China (Shenzhen andGuangzhou).


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Table

4.

Throughputofcontainer

portsin

Japan,KoreaandChinasince

1970.

Region

Country

Port

1970

1975

1980

1985

1990

1995

2000

2002

2004

2006

Northeast

Asia

Japan

Kobe

90

904

727

1518

2595

1463

2265

1992

2176

2413

Tokyo

54

358

631

1004

1555

2117

2899

2712

3358

3969

Nagoya

44

95

205

422

897

1477

1911

1927

2155

2752

Yokohama

328

722

1327

1647

2756

2317

2364

2717

3200

Korea

Busan

632

1148

2348

4502

7540

9436

11430

12039

NorthChina

Shanghai

206

456

1527

5613

8620

14557

21710

Qingdao

135

600

2120

3410

5139

7702

Tianjin

320

702

1708

2410

3814

5950

Yantian

2148

4148

2871

Ningbo

902

1860

4005

7068

Dalian

370

1011

2211

3212

South

China

HongKong

12549

18100

19144

21984

23539

Guanzhou

2180

3308

6600

Shenzhen

3993

7613

13615

18469

Xiamen

84

1084

1750

4019

Note:Unit:1000TEUs.

Source:

Compiled

from

[58].


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Japan is a long, narrow island country and, therefore, the port industry plays anessential role in Japan’s economic activities. More and more top quality containerterminals are set to provide the response to the increasing demand for containertransportation. In Japan, major container ports were built in Tokyo Bay (the portsof Tokyo and Yokohama), Ise Bay (the port of Nagoya) and Osaka Bay (the ports ofKobe and Osaka). Japan has been well-endowed with port infrastructure for thecontainer trades since the 1970s. At that time, based on the advantage of itsindustrialisation, Japan dominated the whole of Asia’s container trades. However,such an illustrious situation has changed dramatically from the middle of the 1980s.Japanese ports have been moving down in the world ranking over the last twodecades. The falling competitiveness of Japanese ports has been a serious concern forboth government and industry. In response to the challenge, investment in Japanesecontainer terminals was emphasised in 1996. In 1998, the Japanese government settheir target to ‘Surpass other major ports in Asia in terms of cost and service in about3–5 years’.

South Korea is only a part of a small peninsula but with vast potential incontainer transportation. Ideally located in the centre of the world’s main shippinglines, particularly for the Trans-Pacific route, South Korea has set their target to beone of the major logistics hubs in East Asia. Indeed, the container ports of SouthKorea not only carry out about 99.8% of the cargo handling for national foreigntrade, but also handle transhipment cargo originating from China, Russia andNorthwestern Japan. The ports of Busan, Gwangyang and Incheon togetherconstitute the main force of South Korea’s container transportation. There are 21container berths totalling 6220 meters at the port of Busan; 12 berths totalling 3700

Container throughput in Japanese ports since 1970

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1970

1975

1980

1995

1990

1985

2006

2004

2002

2000

Year

TEU

(1,

000)

Container throughput in Busan portin Korea since1970

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Year

TEU

(1,

000)

Container throughput in northeast Chinese portssince 1970

0

5,000

10,000

15,000

20,000

25,000

1970 1975 1980 1985 1990 1995 2000 2002 2004 2006Year

TEU

(1,

000)

Container throughput in southeast Chinese portssince1970

0

5,000

10,000

15,000

20,000

25,000

Year

1970 1975 1980 1985 1990 1995 2000 2002 2004 2006

TEU

(1,

000)

Figure 3. Total TEUs by major container ports in Japan, Korea and China since 1970.


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meters at the port of Gwangyang and five multi-purpose berths at Incheon port.Apart from the port of Incheon, both Busan and Gwangyang have the ability forhosting sixth generation container ships. Similar to the other countries in East Asia,existing container handling capacity falls far behind the trade and transhipmentdemand [17, 43].

4.2. Network perspectivesAnalysing container hub ports used to evaluate with their throughput, largely interms of TEUs. There is, however, a question that greater volume of containerthroughput should be regarded as the main or sole condition to become a regionalhub port. As is defined in the previous section, a greater level of connectivity withneighbouring ports via shipping lines could be another signal factor with which tojudge whether or not a certain port is in a region.

A promising alternative for such an examination is a network theory, which ispart of graph theory in the social network analysis [66] and is an area of computerand network science being useful for mapping and measuring of relationships andflows between objectives (i.e. people, groups, organisations and other connectedinformation/knowledge entities). It can be presented in a form of visual andmathematical relationships. Network theory concerns itself with the study of graphsas a representation of either symmetric relations or, more generally, of asymmetricrelations between discrete objects. Each graph represents a set of objects calledvertices (or nodes) connected by links called edges (or arcs). Scott [67] explains that agraph structure can be extended by assigning a weight to each edge or by making theedges to the graph directional (e.g. X links to Y, but Y does not necessarily link to X,as is in webpages), which is technically called a digraph. In graph theory, a digraphwith weighted edges is called a network. A primary aim/usage of graph theory is toidentify an ‘important’ objective (called actor). On the other hand, the centrality andprestige concepts of graph theory seek to quantify graph theoretic ideas about anindividual actor’s prominence within a network by summarising structural relationsamong the nodes [68]. The centrality concept shows how many inter-relationships anactor is involved with other actors in the network, regardless of sending and receivingdirectionality (i.e. volume of activity), whilst the prestige concept indicates how manydirected ties an actor receives from other actors, but the actor does not initiate suchrelations (i.e. actor’s popularity is greater than extensivity) [66, 68].

These two concepts have a potential meaningfully applicable to the maritimetransport and logistics which is in nature a network-based industry. Measuring thecentrality is a widely used methodology in the field of transportation: for example,Ducruet et al. [69], Blonigen and Wilson [70] and Ducruet et al. [71]. Ducruet et al.[69, 71] examine the Northeast Asia’s hub port status according to centralitymeasurement with ‘degree centrality’ and ‘betweenness centrality’. The degreecentrality can be simply measured by the sum of direct networks between nodes: asum of direct network connection by shipping lines between two ports. Thebetweenness centrality is a measure of a node within a graph, and nodes that occuron a number of shortest paths between other nodes have higher betweenness thanthose that do not: the sum of proportions, for all pairs of ports, in which a main portis involved in a pair’s geodesics.

These centrality measurements would be a useful tool to diagnose the regionalhub port competition in Northeast Asia or even other parts of the world where anumber of adjacent ports make a significant effort to be a key port in that region.


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Currently both Japanese and South Korean container ports have lost theircompetitive position to Chinese ports in terms of container throughput. However,it does not necessary indicate that they have also lost their relative hub port status;it might have been maintained or even have been strengthened based on networkanalysis. An analysis of regional hub port competition based on network theorywould enable to provide a useful insight into how regional ports take an advantageagainst competitors and co-operate each other within the region.

5. Concluding remarks

This article has attempted to make a meaningful concept and definition of maritimelogistics hubs in the spirit that an effective literature review facilitates to enhanceacademic knowledge depth and horizon. There have been a number of empirical-based studies on the topic but those researches are conducted under vagueassumption or definition on maritime logistics hub, generally proxied in a form ofcontainer hub ports. While those empirical analyses have their own merits byoffering a fact-based picture of the industry trend over the past years, they areunfortunately unable to clarify issues of what a maritime logistics hub or containerhub port is, what factors make a hub, how to predict next steps, and what measures,in terms of policy and strategy making, are to be made to be a hub. It is hoped thatthe review made in this article initiates further discussion and scientifically rigoursexamination on the topic from a variety of qualitative and quantitative perspectives.This line of research will surely be beneficial to those engaged in port developmentand policy making and in daily port operations and management, and otherstrategically related industry sectors.

Nevertheless, this study has such inevitable shortcomings that existing literaturesare not rich enough to be directly applicable to the topic concerned, that the boundaryof disciplines associated with the issue is still high to be pushed down, which makesthings worse in making a consensus towards a precious concept, definition and scopeof the matter and that this line of review might not be comprehensive to digest all thenecessary aspects and perspectives related to the topic. It is sincerely hoped that thoselisted shortfalls and others not identified herein are the ones that we maritimeacademic community can deal with in an objective and scientific manner so that ourunderstanding and knowledge are elevated and embellished.

Acknowledgements

An earlier version of this article was presented at the 12th WCTR in Lisbon held on11–15 July 2010. The authors are grateful to the conference organiser and scientificcommittee members for constructive and helpful comments on the previous version,which are well embraced into the current version with the enhanced quality as it is.Due appreciation also goes to the guest editors of this special issue during thepreparation and review process.

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