Professor in Maritime Economics and Logistics (MEL) Dalian Maritime University and Sorbonne University. Address: Erasmus School of Economics Erasmus University Rotterdam Oostmaaslaan 336 3063 DD Rotterdam
A lot of ink has been shed lately on the concept of port connectivity. This is particularly true ... more A lot of ink has been shed lately on the concept of port connectivity. This is particularly true currently in view of the strength of global shipping alliances (GSA), their ability to jointly ‘manage’ the supply of tonnage, and the negative impact such power has had on the frequency of services, the number of companies calling at a port, on containership sizes, and call sizes, i.e., on port connectivity. However, connectivity alone cannot explain the importance of a port as an international hub, its attractiveness to shippers, and its ability to develop new transshipment traffic (no matter how well connected a port is in the Arctic, or in Tierra del Fuego, it will never assume hub-port status). We argue that connectivity needs to be combined with measures of centrality , as these are derived from network theory . We thus introduce the novel concept of composite connectivity : Through an innovative use of two-stage data envelopment analysis (DEA) and complex network theory, we first evaluate the efficiency of ‘basic connectivity’ and use this as input in the second stage, which measures the strength of centrality . To do so, we employ such network theory measures as betweenness centrality , closeness centrality , and eigenvector centrality . The “Composite Connectivity Index” — CCI is thus obtained as the ratio of (our measures of) port centrality to port connectivity. The top nine mainland China ports are used as a case-study. Our results (and rankings) conform to the general perception on the international importance of the ports of Shanghai, Shenzhen, and Hong Kong, thus demonstrating the validity of our model. The usefulness of CCI as a decision-support tool for ports with hub aspirations is, we believe, obvious.
International Journal of Shipping and Transport Logistics, 2021
We evaluate the respective roles, functions and prospects of the 15 Chinese ports, intended to be... more We evaluate the respective roles, functions and prospects of the 15 Chinese ports, intended to be the 'eastern end' of China's Belt and Road Initiative (BRI). To achieve this, and thus contribute to the future development of BRI, we introduce the concept of sustainable development capability. We employ principal component analysis and analytic hierarchy process to build a model which evaluates the (cooperative) sustainability of the ports, based on four dimensions: capacity of port operations; (ambient) economic conditions; environmental factors; and human intellect and technology (HIT). Sensitivity and cluster analysis are used, to classify the ports into four categories (respective roles): international hub ports, regional hub ports, node ports, and regional gate ports. We hope that the port system we present and assess here will provide guidance to ports and countries, especially in Europe, leading to the right 'port alliances', that could turn BRI into an efficient global transportation system.
There is a classic episode on YouTube of the old American show "I Love Lucy". In it, Lucy and her... more There is a classic episode on YouTube of the old American show "I Love Lucy". In it, Lucy and her best friend Ethel go to work wrapping candies on an assembly line. The line keeps speeding up with the candies coming closer together and, as they keep getting farther and farther behind, Lucy and Ethel scramble harder and harder to keep up, finally eating the candies and placing them in their clothes so as to give the perception they are catching up. But in their ill-fated effort, Lucy says "I think we're fighting a losing game". Indeed, Lucy's and Ethel's situation is a reflection of the crisis we have in our supply chains today; they both became supply chain bottlenecks with their factory's production decreasing and product availability diminished. The supply chain crisis today is fueled in part by economic stimulus packages, changes in household expenditure patterns, and the resulting upward e-commerce growth. Eighty-five percent of U.S. households received stimulus payments, with many spending their payments on e-commerce goods. Additionally, official encouragements to stay at home, not travel, and refrain from gathering in groups in restaurants, gyms, and movie theaters led families to shift their discretionary expenditures from travel and leisure to home improvements and electronics. McKinsey reports that in the U.S. alone, 2020 e-commerce sales as a percent of retail sales reached slightly over 32%, from 15% a year earlier. Of course, this was not only a U.S. phenomenon; UNCTAD reports that in 2020, when many countries were reeling from the pandemic in the year's first quarter, global e-commerce as a percent of total retail sales increased from 16% in 2019 to 19% in 2020, with the United Kingdom, Korea, and China e-commerce sales increasing to at least 23% of retail sales in 2020. Simply put, the disruptions we are witnessing today in the form of blockages, port congestion, lack of goods, equipment and labor and, above all, global inflation and skyrocketing freight rates are just a textbook case of Keynesian excess demand vis à
This is the Introduction and Part I (container leasing market) of the complete Report on Liner Sh... more This is the Introduction and Part I (container leasing market) of the complete Report on Liner Shipping and Containerization. All things considered, investing in containers is not a bad idea after all.
&... more &amp...
"Since its appearance in 2003, the what has come to be known as “The Erasmus Rep... more "Since its appearance in 2003, the what has come to be known as “The Erasmus Report” has been making headlines throughout the world. This, mainly due to its finding that “liner shipping conferences have a stabilizing effect on freight rates and are thus a low cost ‘necessary evil’ for trade promotion and for the survival from destructive competition of this most crucial of industries”. Unfortunately, this result was not to the liking of DG COMP who, as it became clear, had already made its decision to do away with conferences, expecting the Erasmus Report to just rubber stamp its decision. Ten years later (2012) the Report continues to prove how right it was. European shippers now vehemently complain about rate volatility and this is just music to my ears."
"ATENCO was perhaps one of the largest European Commission projects on port deve... more "ATENCO was perhaps one of the largest European Commission projects on port development and pricing. The main objective of the project was to gauge the extent to which infrastructure development policies and related pricing in one country/port might impact traffic distribution among competing ports, and consequently to assess the desirability of developing a more harmonised approach towards port development across Europe. The present brief report to the European Commission, uploaded below, summarizes the objectives of the various Work Packages and presents the project’s main conclusions. Amongst them, the project claims that, in spite of the benefits to society of long-run marginal cost pricing, in industries with high fixed costs, capital indivisibilities and increasing returns to scale such as ports, particularly those operating in a competitive environment, marginal cost pricing is not so straightforward, whereas full cost recovery, in combination with the user pays principle, can form a workable basis for fair and efficient pricing. In addition, the project advocated for the need for accurate and standardised statistics on various port magnitudes and costs; transparency in port accounts and standardisation of accounting systems; definition of the relationship between the port and its ‘institutional supervisor’; and agreement on what is or is not allowed as public support to seaports (state aid). The report showed that if further progress on these issues were to be made, full cost recovery would become more straightforward, while the pricing policies to implement this could be left to the commercial skills of individual ports."
I have updated my ever-developing OBOR presentation, following countless discussions with senior ... more I have updated my ever-developing OBOR presentation, following countless discussions with senior policy makers in Europe and China, with more inputs on European trade and investment policies; TPP; Regional Comprehensive Economic Partnership (RCEP); Persian Gulf Ports; Africa; Mediterranean; Iran; Russia; India; Pakistan; as well as certain (in my view) "missing links" in the Caspian and Black Seas. I also touch upon Global Shipping Alliances, mega-ships, Panama and Suez Canals. Finally, some thoughts on European ports policy and on the financing of ports are offered. To be continued (of course)...
A lot of ink has been shed lately on the concept of port connectivity. This is particularly true ... more A lot of ink has been shed lately on the concept of port connectivity. This is particularly true currently in view of the strength of global shipping alliances (GSA), their ability to jointly ‘manage’ the supply of tonnage, and the negative impact such power has had on the frequency of services, the number of companies calling at a port, on containership sizes, and call sizes, i.e., on port connectivity. However, connectivity alone cannot explain the importance of a port as an international hub, its attractiveness to shippers, and its ability to develop new transshipment traffic (no matter how well connected a port is in the Arctic, or in Tierra del Fuego, it will never assume hub-port status). We argue that connectivity needs to be combined with measures of centrality , as these are derived from network theory . We thus introduce the novel concept of composite connectivity : Through an innovative use of two-stage data envelopment analysis (DEA) and complex network theory, we first evaluate the efficiency of ‘basic connectivity’ and use this as input in the second stage, which measures the strength of centrality . To do so, we employ such network theory measures as betweenness centrality , closeness centrality , and eigenvector centrality . The “Composite Connectivity Index” — CCI is thus obtained as the ratio of (our measures of) port centrality to port connectivity. The top nine mainland China ports are used as a case-study. Our results (and rankings) conform to the general perception on the international importance of the ports of Shanghai, Shenzhen, and Hong Kong, thus demonstrating the validity of our model. The usefulness of CCI as a decision-support tool for ports with hub aspirations is, we believe, obvious.
International Journal of Shipping and Transport Logistics, 2021
We evaluate the respective roles, functions and prospects of the 15 Chinese ports, intended to be... more We evaluate the respective roles, functions and prospects of the 15 Chinese ports, intended to be the 'eastern end' of China's Belt and Road Initiative (BRI). To achieve this, and thus contribute to the future development of BRI, we introduce the concept of sustainable development capability. We employ principal component analysis and analytic hierarchy process to build a model which evaluates the (cooperative) sustainability of the ports, based on four dimensions: capacity of port operations; (ambient) economic conditions; environmental factors; and human intellect and technology (HIT). Sensitivity and cluster analysis are used, to classify the ports into four categories (respective roles): international hub ports, regional hub ports, node ports, and regional gate ports. We hope that the port system we present and assess here will provide guidance to ports and countries, especially in Europe, leading to the right 'port alliances', that could turn BRI into an efficient global transportation system.
There is a classic episode on YouTube of the old American show "I Love Lucy". In it, Lucy and her... more There is a classic episode on YouTube of the old American show "I Love Lucy". In it, Lucy and her best friend Ethel go to work wrapping candies on an assembly line. The line keeps speeding up with the candies coming closer together and, as they keep getting farther and farther behind, Lucy and Ethel scramble harder and harder to keep up, finally eating the candies and placing them in their clothes so as to give the perception they are catching up. But in their ill-fated effort, Lucy says "I think we're fighting a losing game". Indeed, Lucy's and Ethel's situation is a reflection of the crisis we have in our supply chains today; they both became supply chain bottlenecks with their factory's production decreasing and product availability diminished. The supply chain crisis today is fueled in part by economic stimulus packages, changes in household expenditure patterns, and the resulting upward e-commerce growth. Eighty-five percent of U.S. households received stimulus payments, with many spending their payments on e-commerce goods. Additionally, official encouragements to stay at home, not travel, and refrain from gathering in groups in restaurants, gyms, and movie theaters led families to shift their discretionary expenditures from travel and leisure to home improvements and electronics. McKinsey reports that in the U.S. alone, 2020 e-commerce sales as a percent of retail sales reached slightly over 32%, from 15% a year earlier. Of course, this was not only a U.S. phenomenon; UNCTAD reports that in 2020, when many countries were reeling from the pandemic in the year's first quarter, global e-commerce as a percent of total retail sales increased from 16% in 2019 to 19% in 2020, with the United Kingdom, Korea, and China e-commerce sales increasing to at least 23% of retail sales in 2020. Simply put, the disruptions we are witnessing today in the form of blockages, port congestion, lack of goods, equipment and labor and, above all, global inflation and skyrocketing freight rates are just a textbook case of Keynesian excess demand vis à
This is the Introduction and Part I (container leasing market) of the complete Report on Liner Sh... more This is the Introduction and Part I (container leasing market) of the complete Report on Liner Shipping and Containerization. All things considered, investing in containers is not a bad idea after all.
&... more &amp...
"Since its appearance in 2003, the what has come to be known as “The Erasmus Rep... more "Since its appearance in 2003, the what has come to be known as “The Erasmus Report” has been making headlines throughout the world. This, mainly due to its finding that “liner shipping conferences have a stabilizing effect on freight rates and are thus a low cost ‘necessary evil’ for trade promotion and for the survival from destructive competition of this most crucial of industries”. Unfortunately, this result was not to the liking of DG COMP who, as it became clear, had already made its decision to do away with conferences, expecting the Erasmus Report to just rubber stamp its decision. Ten years later (2012) the Report continues to prove how right it was. European shippers now vehemently complain about rate volatility and this is just music to my ears."
"ATENCO was perhaps one of the largest European Commission projects on port deve... more "ATENCO was perhaps one of the largest European Commission projects on port development and pricing. The main objective of the project was to gauge the extent to which infrastructure development policies and related pricing in one country/port might impact traffic distribution among competing ports, and consequently to assess the desirability of developing a more harmonised approach towards port development across Europe. The present brief report to the European Commission, uploaded below, summarizes the objectives of the various Work Packages and presents the project’s main conclusions. Amongst them, the project claims that, in spite of the benefits to society of long-run marginal cost pricing, in industries with high fixed costs, capital indivisibilities and increasing returns to scale such as ports, particularly those operating in a competitive environment, marginal cost pricing is not so straightforward, whereas full cost recovery, in combination with the user pays principle, can form a workable basis for fair and efficient pricing. In addition, the project advocated for the need for accurate and standardised statistics on various port magnitudes and costs; transparency in port accounts and standardisation of accounting systems; definition of the relationship between the port and its ‘institutional supervisor’; and agreement on what is or is not allowed as public support to seaports (state aid). The report showed that if further progress on these issues were to be made, full cost recovery would become more straightforward, while the pricing policies to implement this could be left to the commercial skills of individual ports."
I have updated my ever-developing OBOR presentation, following countless discussions with senior ... more I have updated my ever-developing OBOR presentation, following countless discussions with senior policy makers in Europe and China, with more inputs on European trade and investment policies; TPP; Regional Comprehensive Economic Partnership (RCEP); Persian Gulf Ports; Africa; Mediterranean; Iran; Russia; India; Pakistan; as well as certain (in my view) "missing links" in the Caspian and Black Seas. I also touch upon Global Shipping Alliances, mega-ships, Panama and Suez Canals. Finally, some thoughts on European ports policy and on the financing of ports are offered. To be continued (of course)...
ΔΕΥΤΕΡΑ 22 ΑΠΡΙΛΙΟΥ 2013 Η NΑΥΤΕΜΠΟΡΙΚΗ Τ α ανωτέρω αναφέρει σε συνέντευξή του στη «Ν» ο καθηγητή... more ΔΕΥΤΕΡΑ 22 ΑΠΡΙΛΙΟΥ 2013 Η NΑΥΤΕΜΠΟΡΙΚΗ Τ α ανωτέρω αναφέρει σε συνέντευξή του στη «Ν» ο καθηγητής ναυτιλιακών του Erasmus University του Ρότερνταμ και πρόεδρος του λιμανιού του Πρίντεζι, Ηρακλής Χαραλαμπίδης, σχολιάζοντας παράλληλα τις διαφορές που υπάρχουν μεταξύ της παραχώρησης και της πώλησης λιμένων, αλλά και τα όσα πράττει η Cosco στον Πειραιά.
Another prediction come true. When the discussions about NOL taking over Hapag Lloyd were taking ... more Another prediction come true. When the discussions about NOL taking over Hapag Lloyd were taking place, I had calculated (and published) that Hapag Lloyd was asking two billion dollars over its market value at those market conditions. Obviously, the deal never took place, as predicted.
...The removal of ‘some’ self-regulatory discipline from such an international industry (where no... more ...The removal of ‘some’ self-regulatory discipline from such an international industry (where no national competition law could obviously apply) will lead to more consolidation; less synergy and economies of scope, thus higher slot costs; service unreliability; limited global networks (cherry picking) and connectivity; higher inventory costs; threat to our Just-in-Time logistical systems, higher prices and jeopardized export competitiveness. At the end of the day, it will again be the European citizen that will have to foot the bill of the Commission’s experimentations on such and important sector...
Μετά από πολύµηνες διαβουλεύσεις, διαπραγµατεύσεις και µελέτες, η βρετανική Κυβέρνηση ανακοίνωσε ... more Μετά από πολύµηνες διαβουλεύσεις, διαπραγµατεύσεις και µελέτες, η βρετανική Κυβέρνηση ανακοίνωσε λίγο πριν τα Χριστούγεννα το πακέτο µέτρων για την αναζωογόνηση της βρετανικής ναυτιλίας.
whose firm is it anyway?" attacks in a rather simplistic way the stakeholder theory as incompatib... more whose firm is it anyway?" attacks in a rather simplistic way the stakeholder theory as incompatible with capitalism. According to him, value maximisation ought to be the firm's sole objective. Acting in this way, the firm maximises also social welfare and contributes to an optimal allocation of scarce resources in the economy. These views are of course by no means new. They are deeply rooted in monetarism and supply-side economics and it could suffice to quote here their principal advocate, Milton Friedman, writing that "…few trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible…" Over the years, these views have been harshly extrapolated. Thus, there is nothing wrong with the corporation that does business with corrupt foreign governments and undemocratic regimes; that completely disregards the environment, industrial relations, the funding of research and universities, better health care, religious observances, arts and culture. The corporation is in it just to maximise profits and all else is a chimera, as Professor Jensen puts it.
...The total network of coastal connections of the country is indicatively decided by the Ministe... more ...The total network of coastal connections of the country is indicatively decided by the Minister, with a validity of two years. The criteria of this network design are political and not economic, as regards “who” should be connected and with what “frequency”. As a result, 65% of connections with “minimum frequency requirements” are uneconomical for the private sector, and are therefore executed through state subsidies which amount to 80 million euros per year. The amount of these subsidies is rather high, particularly if one takes into account that the ships performing public service obligations (PSO-i.e. agones grammes) are fairly old and of inferior quality. Quality criteria do not enter into the PSO contracts...
...No matter how well we prepare you in such things as finance and marketing, you will only be ab... more ...No matter how well we prepare you in such things as finance and marketing, you will only be able to scratch the surface of the matter if you are unable to understand that what a manager calls, for instance, "market segmentation" is nothing more than what an economist would call "price discrimination"...
Dear followers, colleagues, past and present students:
Although I do not intend to cancel this p... more Dear followers, colleagues, past and present students:
Although I do not intend to cancel this profile and I will do my best to keep it updated, the emphasis these days is shifting towards “Research Gate”. If still interested in my work, I would like to invite you to join me there, and follow my profile at: https://www.researchgate.net/profile/Hercules_Haralambides.
AGENDA
One-Belt-One-Road and Mediterranean Ports
Liner Shipping: Port-to-Port or Door-to-Door?
T... more AGENDA
One-Belt-One-Road and Mediterranean Ports Liner Shipping: Port-to-Port or Door-to-Door? The Response of Ports to Concentration in Shipping The Italian Port Reform Masterplanning and City-Port Relationships The EU Port Regulation Conclusions
The paper/presentation is uploaded on my ResearchGate profile. It will be uploaded on Academia later on.
OBOR is a US$ 1 trillion plan with an estimated economic multiplier of 2.5. Since the plan was an... more OBOR is a US$ 1 trillion plan with an estimated economic multiplier of 2.5. Since the plan was announced three years ago, only 5% of this budget has been spent. There are as many plans as interested countries and China is talking to all of them. 10,000 articles have been written on the subject, but NDRC has retained only 100! Nothing is decided yet, and may analysts tend to see OBOR as a geopolitical “carrot and stick”, something similar to “Marshall Plan”.
China is not investing only in African infrastructure but it transfers manufacturing activity there. By the end of 2015: 128 industrial projects in Nigeria, 80 in Ethiopia, 77 in South Africa, 48 in Tanzania and 44 in Ghana. It seems developing Africa is much easier than developing China’s own northwestern territories.
With investments in Australia (Darwin) and a continuing interest in the Nicaraguan canal, China will soon be looking at the Pacific Ocean, expanding OBOR to a global, “around-the-world” network, in competition to TPP. What are the prospects of the Panama Canal, in view also of competition from the Suez Canal? To my view, not very promising.
Russia is squeezed from both sides: USA/NATO from the west / China-Eurasia-OBOR from the east. Russia’s response: its own ‘OBOR’: The North-South Transport Corridor.
Both Russia and China intend to develop their own currencies into reserve, clearing ones, away from the dollar and a crisis-prone, risky and overburdened western financial system. China in particular has created a currency clearing house in Qatar while Russia has an “oil for goods” deal with Iran. The latter country too has recently entered into a “rail for oil” barter deal with Turkey.
In 2013, and after two unsuccessful attempts since 2001, The European Commission introduced a new... more In 2013, and after two unsuccessful attempts since 2001, The European Commission introduced a new draft regulation, yet to be voted and enacted by the Council of Ministers and the European Parliament. This policy intervention aims to regulate two long-outstanding problems of the European port industry:
1. Liberalization of the markets for port services 2.Transparency and operational and financial autonomy of ports
Vickerman, Roger (ed.) International Encyclopedia of Transportation vol 5. pp. 545-556. United Kingdom: Elsevier Ltd., 2021
From the poorly managed public infrastructures of the previous century, ports have evolved into h... more From the poorly managed public infrastructures of the previous century, ports have evolved into high-tech enterprises and crucial nodes in global supply chains of production, transport and distribution. Containerization has been instrumental in this transformation, together with the impressive and seemingly unstoppable gigantism in containership sizes. The former ‘city-ports’ –facilities created inside or at the confines of river cities—are no longer sufficient to handle the requirements of modern ships, and ports, in need of more space and water depths, have moved downstream, in river estuaries, towards the open sea. Pressure on ports to continue upgrading their infrastructure is mounting, necessitated by increasing port competition and the requirements of mega-ships. Limits to growth are, however, visible, and equally visible is the need for a more balanced approach between the benefits of mega-ships and the costs these ships impose on the planning, development and operations of ports.
Uploads
Papers by Hercules Haralambides
Although I do not intend to cancel this profile and I will do my best to keep it updated, the emphasis these days is shifting towards “Research Gate”. If still interested in my work, I would like to invite you to join me there, and follow my profile at:
https://www.researchgate.net/profile/Hercules_Haralambides.
I hope to meet you all there.
Regards,
Hercules
One-Belt-One-Road and Mediterranean Ports
Liner Shipping: Port-to-Port or Door-to-Door?
The Response of Ports to Concentration in Shipping
The Italian Port Reform
Masterplanning and City-Port Relationships
The EU Port Regulation
Conclusions
The paper/presentation is uploaded on my ResearchGate profile. It will be uploaded on Academia later on.
China is not investing only in African infrastructure but it transfers manufacturing activity there. By the end of 2015: 128 industrial projects in Nigeria, 80 in Ethiopia, 77 in South Africa, 48 in Tanzania and 44 in Ghana. It seems developing Africa is much easier than developing China’s own northwestern territories.
With investments in Australia (Darwin) and a continuing interest in the Nicaraguan canal, China will soon be looking at the Pacific Ocean, expanding OBOR to a global, “around-the-world” network, in competition to TPP. What are the prospects of the Panama Canal, in view also of competition from the Suez Canal? To my view, not very promising.
Russia is squeezed from both sides: USA/NATO from the west / China-Eurasia-OBOR from the east. Russia’s response: its own ‘OBOR’: The North-South Transport Corridor.
Both Russia and China intend to develop their own currencies into reserve, clearing ones, away from the dollar and a crisis-prone, risky and overburdened western financial system. China in particular has created a currency clearing house in Qatar while Russia has an “oil for goods” deal with Iran. The latter country too has recently entered into a “rail for oil” barter deal with Turkey.
1. Liberalization of the markets for port services
2.Transparency and operational and financial autonomy of ports