Port Privatization, Efficiency and Competitiveness

Project and Seminar Material for Transport Management Technology

Abstract

This study was carried out to examine port privatization, efficiency and competitiveness using Grimaldi Shipping Line, Apapa Lagos as a case study. Specifically, the study aimed at ascertaining if port privatization has any positive effect on port efficiency and competitiveness. The study employed the survey descriptive research design. A total of 50 responses were validated from the survey. From the responses obtained and analysed, the findings revealed that port privatization has a positive effect on port efficiency and competitiveness. This is as the Pearson correlation test showed a positive significant relationship (.922**) between port privatization and port efficiency. The study recommend government to encourage more on privatization of sea ports terminals and grand license to capable companies and individuals since it has been proven that privatization increases the level of efficiency and competition in maritime trade.

Chapter One

Introduction

1.1 Background of the Study

In recent years, the market environment in which ports operate has changed significantly, especially the development of vertical and horizontal integration in the international maritime transport chain. Shipping companies in particular have taken the initiative in this trend, which results in an increase in the market power of the large shipping companies over the other service providers, such as port authorities. Port authorities have realized that the competitiveness is very important for them to win the business and that the speed of container handling and consequent vessel turn around time is a crucial issue in terms of competition. In addition, many port authorities and port operators think that increasing private sector participation in ownership and operation of container ports (terminals) can help port authorities improve their operation efficiency. Therefore, port privatization becomes one of the most obvious phenomena in the current port industry.

1.2 Statement of the Problem

It is widely believed that ports form a vital link in the overall trading chain and, consequently, port efficiency is an important factor for a nation to achieve international competitive advantage (Tongzon, 1989; Chin and Tongzon, 1998). In addition, most port authorities think that increasing private sector participation in the ownership and operation of container ports (terminals) can help them improve their operation efficiency. These are the reasons that port privatization becomes one of the most obvious phenomena in current port industry. Therefore, it is indispensable to identify both the relationship between the ownership structure and port efficiency, and the relationship between port efficiency and port competitiveness.

1.3 Objective of the Study

The main purpose of this study is to examine whether port privatization has a positive effect on port efficiency and competitiveness.

1.4 Research Questions

Does Port privatization have effect on port efficiency and competitiveness?

1.5 Research Hypothesis

The following hypothesis were formulated for this study:

H0: There is no significance positive relationship between port privatization and efficiency

HA: There is a significance positive relationship between port privatization and efficiency

1.6 Significance of the Study

This study will be able to provide some policy implications for port authorities and port operators. First, it will tell us whether port privatization has a positive effect on port operation efficiency, and if has, what is the best extent of private sector participation in port functions. Secondly, the results will show the importance of port operation efficiency for port authorities and port operators to obtain competitive advantages. Finally, this study will also identify other significant factors that determine the port competitiveness.

1.7 Scope of the Study

This study focuses on port privatization, efficiency and competitiveness using Grimaldi Shipping Line, Apapa Lagos as a case study.

It is worth noting that this study does not investigate the effects of three justified determinants of port competitiveness, cargo handling charges, reliability and products differentiation due to the unavailability of the data. Running short of these data must constrain the comprehensive analysis of port competitiveness. For example, cargo handling charge is a very common tool for port authorities and port operators to compete with their competitors. Incorporating this variable into the model will tell us how to balance the positive effect from high operation efficiency and the negative effect from high operation charges to achieve the maximum of port competitiveness.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

In this study, our focus was to carryouta critical analysis onport privatization, efficiency and competitiveness using Grimaldi Shipping Line, Apapa Lagos as a case study. The study specifically was aimed at ascertaining if port privatization has any positive effect on port efficiency and competitiveness.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are active workers in Grimaldi Shipping Line, Apapa Lagos.

The findings revealed that port privatization has a positive effect on port efficiency and competitiveness.

5.2 Recommendation

Based on the responses obtained, the researcher proffers the following recommendations:
The federal government of Nigeria should encourage more on privatization of sea ports terminals and grand license to capable companies and individuals since it has been proven that privatization increases the level of efficiency and competition in maritime trade.

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