Strategies of terminal operating companies in changing environments

Abstract

This paper deals with the changing role of terminal operating companies (TOCs) in supply chains. Relevant trends in the port industry and the consequences for terminal operators are discussed. A framework to analyse strategies of TOCs, based on Brewer's [2001 Handbook of logistics and supply chain management. Amsterdam: Pergamon.] classification of logistics service providers with regard to their geographical coverage and provision of integrated logistics solution is developed. The framework is applied to TOCs in the Netherlands with the use of a survey. TOCs in the Netherlands increasingly offer integrated logistics services. The number of additional services, next to the terminal services, offered depends on the commodities that are handled by TOCs; container TOCs offer fewer integrated logistics services than breakbulk TOCs. Most of the TOCs (still) operate in their ‘home port’ alone but roughly 15% of them have plans to expand internationally. TOCs mostly provide additional services in-house, partnerships are less well developed. These conclusions enhance the understanding of the changing role of TOCs in supply chains.

Keywords:

• ports
• terminal operating companies
• strategies
• innovations

Notes

A good example is Hutchinson Port Holdings, world's largest terminal operator, which increasingly invests in additional services, like road haulage and inland logistics services. Another example is PSA Corporation (Singapore), the second largest terminal operator, which strongly invests in logistics zones in China at the moment.

A considerable number of TOCs are purely local. Giving these a score of 0.1 instead of 0 allows for clearer figures, while the index is relative in any case, so absolute values are not important.

All firms in the Netherlands are registered and classified in certain industry codes. The list of 69 TOCs covers all firms for the industry code ‘loading unloading and transhipment services’. A few firms that also do terminal operations may be classified differently, but this list is rather complete.

Some bulk TOCs are single-user facilities, where the parent company, often a manufacturing company, runs the terminal on a cost-recovery basis.