Transport Reviews, Vol. 26, No.

2, 167–188, March 2006

Developments in Container Port Competition in

East Asia

WEI YIM YAP*, JASMINE S. L. LAM** and THEO NOTTEBOOM†

*Maritime and Port Authority of Singapore, Singapore **School of Civil and Environmental
Engineering, Nanyang Technological University, Singapore †Institute of Transport and Maritime
Management Antwerp, University of Antwerp, Antwerp, Belgium
Taylor and Francis Ltd
TTRV127094.sgm

(Received 3 September 2004; revised 16 March and 11 July 2005; accepted 21 July 2005)
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ABSTRACT The ports of Hong Kong, Busan and Kaohsiung have long dominated
container handling in East Asia. However, the emergence of new transhipment and gate-
way hub candidates, which include Shanghai, Shenzhen, Kwangyang and Qingdao,
among others, will vie with these incumbents for a greater share of container traffic. Some
might even unseat the incumbents. This study finds, through evidences from container
shipping services connecting the region to major markets and trade routes between 1995
and 2001, that Mainland Chinese ports are increasingly attractive as direct ports of call
for mainline services. The evidence also suggests that new services started by mainline
operators calling at Mainland China are bypassing Japanese and Taiwanese ports.
Nonetheless, these services continue to call at Hong Kong. Although the composition of
containers handled at Mainland Chinese ports consists largely of gateway cargo, these
ports are expected to handle a rising share of transhipment traffic.

Introduction
The container ports of Hong Kong, Busan and Kaohsiung have dominated container
handling in East Asia. Their share of twenty-foot equivalent units (TEUs) handled
among the top ten ports in the region rose from 49% in 1980 to 55% in 1990 (Informa,
1982–2003). In 2000, the combined throughput of these ports totalled 33 million
TEUs and accounted for 61% of all containers handled by the top ten ports in East
Asia. This development corresponded with the boom in external trade that resulted
from successful export-oriented economic strategies pursued by Hong Kong,
Taiwan and South Korea. The hub statuses of Hong Kong, Busan and Kaohsiung
were further reinforced by additional transhipment traffic generated through the
successful implementation of this strategy in other countries of the Asia-Pacific rim.
From the 1990s, however, the gradual shift in the gravity of economic growth and
trade from Japan to China led to the emergence of new transhipment and gateway
hub ports, which include Shanghai and Shenzhen. The incumbents also face the
prospect of intensifying competition from other potential candidates such as

Correspondence Address: Wei Yim Yap, Maritime and Port Authority of Singapore, 460 Alexandra Road
#18-00 PSA Building, Singapore 119963. Email: Wei_Yim_YAP@mpa.gov.sg

0144-1647 print/1464-5327 online/06/020167-22 © 2006 Taylor & Francis

DOI: 10.1080/01441640500271117
168 W. Y. Yap et al.

Kwangyang, Qingdao and Ningbo. These emerging ports will vie for a greater share
of container traffic in East Asia.
The paper aims to shed a greater light on the competition dynamics between
container ports in East Asia by analysing the extent and degree of port competi-
tion between the major transhipment and gateway ports from the container ship-
ping perspective. The analysis will dwell on the competition between ports on
different markets and trade routes offered by container shipping services calling
in the region. The paper will also address the potential impact of trade develop-
ments in China on container shipping services deployed in the region including
future trends that are likely to have a significant impact on the development of
container port competition. A general overview of developments in the region
from the economic and container port perspectives will be provided in the second
section. The third section gives a general review of research effort devoted to this
issue and discusses the data and research methodology. The fourth section
presents the research findings, which will be complemented with observations
from industry developments on container port competition in the fifth section.
The sixth section looks at selected future trends that will implicate container port
competition in the region. The seventh section concludes the paper.

General Developments
As a whole, East Asia enjoyed steady economic growth in the 1990s. However,
the rate of growth was reduced in the second half of the decade, although China
still exhibits significant growth momentum (Table 1). In terms of merchandise
trade, East Asia accounted for US$2177 billion, or 17% of world merchandise
trade in 2001, with China and Hong Kong together accounting for the largest
proportion of merchandise trade within the region (World Trade Organisation,
2003). Taking a closer look at East Asia’s merchandise trade with the world’s two
largest economies showed that while Japan remained the largest trading partner
of the USA and the European Union (EU),1 China overtook Japan as the largest
exporter to the EU (Table 2). Table 2 also shows that Japan and China enjoyed
huge trading surpluses with the USA and EU. Japan’s trade surpluses with the
USA and EU were US$72 billion and US$28 billion, respectively, while China’s
were US$90 billion and US$41 billion, respectively. In comparison, the trading
surpluses enjoyed by South Korea and Taiwan with the USA and EU were more
modest.
Export-oriented economic strategies enabled Hong Kong, Taiwan and South
Korea to realize dynamic efficiency in resource mobilization and allocation
despite their small country sizes (Meier, 1995). In particular, export-oriented
industrialization strategies enabled these economies to produce for the export
market focusing on manufactured goods. This fuelled economic expansion, which
in turn reinforced trade growth. A virtuous cycle of economic growth is thus
created. The impact of these strategies can be seen by the strong container-
handling performance of Hong Kong, Kaohsiung and Busan in the 1980s and
1990s. This led to a surge in demand for inter- and intra-regional shipping capac-
ity and container-handling facilities. In 2001, of the top ten ports in the world, five
were in East Asia, and of the top ten ports in East Asia, five were in China.
Looking at the container-handling performance of the top ten ports in East
Asia, container throughput grew by an average of 11% annually in the past
decade to reach 56 million TEUs in 2001 (Table 3). The performances of Chinese
 Developments in Container Port Competition in East Asia 169

Table 1. Economic performance in East Asia (US$billion and percentage)

AAGR, 1991–95 AAGR, 1996–2001

Gross Domestic
Country/region Product, 2001 Exports Imports GDP Exports Imports GDP

Japan 503 304 8.9 9.1 1.5 −0.4 0.0 −0.3

China 9593 19.9 20.0 28.8 12.0 11.9 7.0
Taiwan 9542 10.0 13.2 9.9 1.1 1.2 4.4
South Korea 545 013 14.9 13.5 14.9 3.0 −0.1 5.4
Hong Kong 1262 15.2 17.2 12.6 1.1 0.0 1.1

AAGR, average annual growth rate; GDP, Gross Domestic Product (billions of local currency).
Sources: Asian Development Bank (2003); World Trade Organisation (2003).

Table 2. East Asia’s merchandise trade with the USA and European Union-15
(US$billion and percentage)
Exports in 2001 to: Imports in 2001 from:

European Union
USA Share* (European Union) Share USA Share European Union Share

Japan 129.7 11.0 67.2 2.9 57.6 7.9 39.2 1.7

China 109.4 9.3 67.3 2.9 19.2 2.6 26.5 1.2
South Korea 36.5 3.1 19.2 0.8 22.2 3.0 13.6 0.6
Taiwan 34.8 2.9 21.2 0.9 18.2 2.5 11.4 0.5
Hong Kong 10.1 0.9 8.9 0.4 14.1 1.9 18.8 0.8

*Share of the world’s trade with the USA and EU.

Source: World Trade Organisation (2003).

Table 3. Overview of the top container ports in East Asia, 2001 (TEUs and
percentage)
Average annual growth rate,
Rank Port* 1990 2001 1990–2001

1 Hong Kong (1) 5 100 637 17 900 000 12.1

2 Busan (3) 2 348 475 8 072 814 11.9
3 Kaohsiung (4) 3 494 631 7 540 524 7.2
4 Shanghai (5) 456 123 6 340 000 27.0
5 Shenzhen (8)** – 5 076 435 66.6
6 Qingdao (18) 135 419 2 640 000 31.0
7 Tokyo (19) 1 555 138 2 535 841 4.5
8 Yokohama (22) 1 647 891 2 303 780 3.1
9 Kobe (27) 2 595 940 2 010 343 −2.3
10 Tianjin (28) 320 000 2 010 000 18.2
Total 17 654 254 56 429 737 11.1

*Figures in parentheses show the ranking of the port in the world.

**Shenzhen port began to handle containers in 1992. Hence, the average annual growth rate computed
for 1992–2001.
Source: Informa (1992–2003).
170 W. Y. Yap et al.

ports were particularly astounding. These ports registered strong double-digit

growths ranging from 18% for Tianjin to 31% for Qingdao. Shenzhen, which
began to handle containers in 1992, also grew by an astonishing average rate of
67% in the period concerned. Hong Kong continued to be the world’s busiest
container port, a title which the port has held for 12 of 15 years since 1987.
Busan also registered strong growth to become the third busiest container port
in the world after having been in the fifth place for 8 years running (1991–98).
As for Kaohsiung, the port has been in the top five positions since 1978.
However, its market share among the top ten ports slid from a peak of 18% in
1986 to 13% in 2001. For Japanese ports, single-digit growths or even declining
performance in the past decade led to the ousting of their major ports from the
top five positions in East Asia and the top ten positions in the world from 1997.
The constitution of the top five ports has also changed with three ports now
being in China.
Examination of container traffic of major ports in the region revealed that Hong
Kong, Taiwanese and South Korean ports handle a larger share of transhipment
traffic than Mainland Chinese and Japanese ports (Table 4). In particular, South
Korean ports saw significant expansion in their transhipment traffic. Tranship-
ment containers handled by Busan more than doubled between 1999 and 2001,
while those for Kwangyang almost quadrupled. Although Kaohsiung registered
the highest transhipment incidence at 55% in 2001, the transhipment incidences of
Hong Kong and Busan were also significant, accounting for a respective 30 and
37% of total container traffic. The composition of container traffic for the top three
ports in East Asia showed that apart from relying on gateway traffic, these ports
also handle significant amounts of transhipment containers. At the other end,
only 1% of containers handled in Shanghai were transhipment boxes, revealing
the current nature of Mainland Chinese ports being gateway ports rather than
transhipment hubs.

Literature Review, Data and Research Methodology

Before going into the research findings, a general review of research effort
devoted to this issue, data concerns and research methodology will be presented.

Table 4. Transhipment traffic of the major ports in East Asia (TEU and
percentage)
Port 1999 2001

Hong Kong 4 814 667 29.7 5 286 600 29.7

Busan 848 330 15.0 2 899 426 36.7
Kaohsiung 3 589 128 51.4 4 120 621 54.7
Shanghai 21 030 0.5 63 400 1.0
Tokyo 269 559 10.0 280 000 10.0
Yokohama 212 958 10.0 232 000 10.0
Kobe 171 904 7.9 175 433 7.9
Osaka 127 320 10.0 63 774 3.7
Taichung 255 198 23.1 269 477 25.2
Kwangyang 22 735 5.0 162 521 19.2

Source: Drewry Shipping Consultants (2003).

 Developments in Container Port Competition in East Asia 171

Competition arises when the involved parties perceive there is value to be

secured above the expected costs of doing so. For effective competition to take
place, Shepherd (1997) suggested that reasonable parity among competitors
who can effect strong pressure on each other is required. Furthermore, there
must be ease of entry by new competitors. In the context of container port
competition, the trend points towards shipping lines as the key players in
determining port choice with increasing attention given to by them to provide
logistical services on a global basis in an integrated approach (Slack, 1985; Van
de Voorde and Winkelmans, 2002). However, Robinson (2002, p. 252) suggested
that shippers play the key role in determining port choice. He suggested that
ports are “elements embedded in value-driven chain systems …” and that it is
important for the port and its service providers to offer sustainable value to its
users vis-à-vis other competing value-driven chain systems. Regardless, cargo
flows will seek for routes that offer the lowest cost for a given service level. As
a node in the logistic chain, container ports that can help to achieve this will be
chosen as the port-of-call.
On port competitiveness, Haezendonck and Notteboom (2002) provided a
comprehensive appraisal by showing that hinterland accessibility, productivity,
quality, cargo generating effect, reputation and reliability are factors that proved
critical in strengthening a port’s competitiveness. Oceanic and hinterland
distances, especially relevant in the East Asian context, also played a significant
role according to Malchow and Kanafani (2001). As a whole, the factors that influ-
ence a port’s competitiveness can be summarized in the extensive framework
proposed by Rugman and Verbeke (1993). These factors were grouped into six
categories that include factor conditions (production, labour, infrastructure, etc.);
demand conditions; related and supporting industries; firm structure and rivalry;
chance; and government intervention.
Competing ports try to lever on the factors that contribute to their competitive-
ness in order to enlarge their captive hinterland, while at the same time they
erode those of their competitors. Van Klink and Van der Berg (1998, p. 8) defined
a seaport’s hinterland as the “continental area of origin and destination of traffic
flows through a port [i.e.] the interior region served by the port”. In the geograph-
ical context of East Asia, which is characterized by long coastlines with large
island(s) groups in close proximity, the hinterland of major East Asian container
ports typically extends beyond their continental confines to include nearby
regions located offshore. For instance, the hinterland of Busan includes not only
that of South Korea, but also parts of Northern China and even Japan. These areas
are served by feeder services calling at the port.
Robinson (1998) showed that the liner shipping network in East Asia evolved
from a complex set of feeder services connected to the major hubs in the 1980s
into a hierarchy of liner networks with high-cost/high-efficiency hubs in the
higher order networks and mix of hub and direct-call ports in the lower order
networks. The highest order ports identified were Hong Kong, Kaohsiung and
Busan. Hong Kong served as the load centre for the Pearl River Delta with a
substantial amount of containers moving through the port originating from, or
destined for, its immediate hinterland in Guangdong province in China. For
Kaohsiung, strong export-led growth of the Taiwanese economy enabled the port
to become a major hub, and the authorization of cross-straits shipping is expected
to boost further container handling at the port. For Busan, considered a load
centre for South Korea, cost-competitive and -efficient strategies pursued by the
172 W. Y. Yap et al.

port in recent years attracted Chinese and Japanese containers to be transhipped

through the port (Fleming, 1997). Busan was thus able to expand its hinterland
beyond South Korea into North East Asia. Fleming also noted that as late as the
mid-1990s, all of China was served by feeder services through Hong Kong or the
Japanese ports, while Busan and Kaohsiung were newcomers to the scene that
vied for Chinese container traffic.
The large proportion of container traffic handled by Hong Kong and
Kaohsiung was because these ports acted as transaction centres that served as
interfaces for regional distribution networks (Haynes et al., 1997). Haynes et al.
also noted that efficiency gains by such ports would be translated into economic
welfare gains for producers at the origin of the supply chain and consumers at the
final destination. This implies that economic benefits generated from a competi-
tive port will have cascading efficiency gains for both its origin and destination
hinterlands through the supply chain systems using the port. Cullinane and Song
(2001) held that no historical real competition existed between these two ports as
they served different hinterlands, namely Southern China and the Philippines,
respectively. However, deployment of larger vessels, the formation of mega-alli-
ances and the concentration of cargo flows in larger hub ports among other
factors would result in overlapping hinterlands, thereby reinforcing and enhanc-
ing inter-port competition between Hong Kong and Kaohsiung.
The premise of Cullinane and Song can be extended to the whole of East
Asia. Hence, ports intending to create and enhance their hub status should
develop competitive advantages based on unique and resilient core competen-
cies (Notteboom and Winkelmans, 2001). This is made even more apparent by
shrinking captive hinterlands arising from the spate of horizontal and vertical
integrations in the transport industry to achieve scope and scale economies.
The situation could be made worse by the concentration of power among the
port’s clientele. Load centre ports that rely on transhipment traffic might also
find themselves vulnerable to the threat posed by the footloose nature of the
cargo.
Determining and establishing the presence and magnitude of port competi-
tion has never been straightforward. The paper aims to shed a greater light on
container port competition dynamics in East Asia by confining its focus to the
top five ports in East Asia: Hong Kong, Busan, Kaohsiung, Shanghai and
Shenzhen, in the period between 1995 and 2001. These ports will be evaluated
against other major ports in the region. Specifically, the study will analyse the
developments in container shipping services calling at these ports in terms of
geographical markets served and the trade routes which they are connected.
The aim is to ascertain the competing ports and establish the arena of competi-
tion. For this purpose, data from a variety of sources have been used. Data for
container throughput, ending 2001, are sourced from yearbooks and magazines
published by Informa UK Ltd, with the longest series dating from 1980. Data for
shipping services deployed by shipping lines are sourced from publications by
Informa UK and the various websites of ports and shipping lines. These are
used to derive slot capacity deployed in a year in terms of TEUs. Annual slot
capacity is therefore calculated by multiplying the average vessel capacity of a
service by its frequency. The usefulness of slot capacity data is that they allow
analysis into the various markets and trade routes served by the target ports.
The slot capacities connected to the selected ports for 1995, 2000 and 2001 are
computed.
 Developments in Container Port Competition in East Asia 173

Research Findings
East Asia attracted 31 million TEUs of slot capacity deployed in shipping services
calling at its ports in 2001, which was up by 68% from 1995. Among these
services, slot capacity deployed in the transpacific trade accounted for the largest
share at 36% in 2001 (Table 5). This was followed by slot capacity deployed in
intra-East Asian and Europe–Far East services, which both stood at 19%.
Interestingly, the growth in slot capacity deployed to East Asia was higher on the
main trades vis-à-vis intra-Asian trades, a reflection of the large China–USA and
China–EU trade.
In terms of connectivity by region, market shares in slot capacity connected to
East Asia for China and South Korea rose to 88 and 41% in 2001, respectively
(Table 6). In contrast, the other regions registered marginal increases or saw
declines in their respective shares for the same period. Other than East Asia,
South East Asia formed the second largest market accounting for 53% of slot
capacity deployed. The regions of West Coast of North America and North
West Europe followed with 32 and 23%, respectively. On the whole, market
shares of the regions connected to East Asia remained fairly constant in the
period concerned. The exception was slot capacity connected to the Central
Mediterranean, which grew by 12% in 2001, which is an indication of the
increasing tendency by shipping lines to use Mediterranean ports as gateways
or transhipment centres for containers originating from or destined for the
Western European hinterland.
On the trade routes connected to East Asia, the bulk of slot capacity deployed
in East–West services continued to favour Hong Kong as the port-of-call (Table 7).
The port accounted for 94 and 87% of the Europe–Far East and transpacific trades,
respectively, in 2001. Hong Kong also accounted for the largest share of slot
capacity deployed between East and South East Asia. Kaohsiung and Busan
followed with 43 and 39% of slot capacity deployed, respectively, in shipping
services connected to the region. Although Kaohsiung continued to attract a
significant share of slot capacity deployed on the Europe–Far East and transpa-
cific trades, its share has declined since 1995. As for Shenzhen, the port overtook
Kaohsiung in the Europe–Far East trade with a fivefold expansion of market
share on that trade. Shenzhen also overtook Busan in the Europe–Far East and
transpacific trades. However, most shipping services calling at Shenzhen were

Table 5. Share of slot capacity deployed by major trade routes to East Asia (%)
Average annual growth
Trade route 1995 2000 2001 rate, 1995–2001

Transpacific 31.8 35.4 35.7 11.2

Intra-East Asia 20.9 20.6 19.1 7.4
Europe–Far East 16.0 17.6 18.6 11.8
East Asia–South East Asia 14.8 14.2 15.3 9.7
All services connected to East Asia 100.0 100.0 100.0 9.1

Source: Computed by the authors. For Tables 5–10, 12 and 13, slot capacity statistics are computed
from data found in publications by Informa UK and from the websites of various shipping lines.
Annual slot capacity deployed in a container shipping service is calculated by multiplying the size of
the average vessel in the service by its frequency. Figures do not sum to 100% as a single service can be
deployed in multiple trades and call at multiple regions.
174 W. Y. Yap et al.

Table 6. Share of slot capacity connected to the major regions from East Asia (%)
Average annual growth
Major regions 1995 2000 2001 rate, 1995–2001

China 85.6 89.1 88.0 9.6

Japan 64.3 52.8 52.4 5.4
Taiwan 58.4 50.5 50.5 6.4
South Korea 38.7 42.0 40.9 10.1
South East Asia 54.2 51.3 52.9 8.6
West Coast of North America 32.6 31.5 32.1 8.8
North West Europe 22.6 22.0 22.8 9.2
Indian Subcontinent 11.1 12.4 11.7 10.1
Central Mediterranean 7.3 12.9 11.5 17.6
All services connected to East Asia 100.0 100.0 100.0 9.1

Source: Computed by the authors.

mainline in nature and the port remains weak in feeder connections. The growth
of Shanghai was less phenomenal compared with Shenzhen, but the port enjoys a
more balanced spread of calls by mainline and intra-regional slot capacity.
Hong Kong also attracted the majority of slot capacity connected to the major
regions except for South Korea (Table 8). In particular, the port accounted for
more than 90% of slot capacity connected to the Central Mediterranean (100%),
the Indian Subcontinent (99%), Taiwan (97%) and North West Europe (95%).
Hong Kong also registered market share increases for China (15%), the Indian
Subcontinent (7%), Taiwan (5%), the West Coast of North America (5%) and the
Central Mediterranean (2%). Surprisingly, Hong Kong had more slot capacity
connected to Taiwan than to Kaohsiung. While Kaohsiung had the second largest
share of the market after Hong Kong in most regions, the port registered falling
market shares for slot capacity connected to South East Asia (−19%), North West
Europe (−17%), the Indian Subcontinent (−15%), the West Coast of North America
(−3%) and Japan (−2%). On the positive side, Kaohsiung increased its share of slot
capacity connected to China from 3% in 1995 to 11% in 2001. As for Busan, the port
almost doubled its share of slot capacity connected to China. It also enjoyed the
largest share of slot capacity connected to other ports in South Korea. However, as
with Kaohsiung, Busan saw its share fall for North West Europe (−7%), the West
Coast of North America (−6%), Japan (−4%), the Indian Subcontinent (−4%) and
the Central Mediterranean (−2%). The performances for Kaohsiung and Busan lay
in contrast to Shanghai and Shenzhen with phenomenal gains registered in slot
capacity connected to the major regions. Whereas Shanghai quadrupled its
market share on average, Shenzhen saw its share increase ninefold. The only
exception was for South Korea, where Shenzhen’s share fell to 18%.
Major ports in East Asia, with the exception of Hong Kong, saw significant
changes to their respective share of slot capacity deployed by shipping services
calling in the region. The mix of expansions and declines in slot capacity calling at
Kaohsiung and Busan on various routes and regions lay in contrast to the general
expansion experienced by Shanghai and Shenzhen. In fact, the performances of
Shanghai and Shenzhen were typical of other major Mainland Chinese ports such
as Xiamen, Ningbo, Qingdao and Tianjin (Table 9). Increasing amounts of
gateway traffic generated by these ports attracted direct calls by shipping services
 Table 7. Share of slot capacity deployed for selected ports in East Asia by trade route
1995 (%) 2001 (%)

Trade route Hong Kong Busan Kaohsiung Shanghai Shenzhen Hong Kong Busan Kaohsiung Shanghai Shenzhen

Transpacific 83.5 42.6 61.3 2.8 6.2 86.8 41.1 58.1 20.4 47.9
Intra-East Asia 38.2 26.7 13.0 17.8 2.2 33.8 35.8 18.9 22.2 2.4
Europe–Far East 99.1 45.0 62.8 11.3 12.1 94.3 38.7 46.8 40.6 61.1
East Asia–South East Asia 77.5 26.5 44.2 4.2 0.0 74.9 26.5 38.5 10.3 8.5
All Services 75.0 38.2 46.9 10.1 4.4 76.3 38.6 43.1 24.8 30.2

Source: Computed by the authors.

Table 8. Share of slot capacity connected to major regions for selected East Asian ports
1995 (%) 2001 (%)

Major regions Hong Kong Busan Kaohsiung Shanghai Shenzhen Hong Kong Busan Kaohsiung Shanghai Shenzhen

China* 50.1 19.3 2.8 28.2 1.7 65.4 34.7 10.8 50.3 41.0
Japan 68.5 44.1 51.5 4.5 1.7 67.9 39.7 42.4 14.8 27.2
Taiwan** 92.1 44.2 57.1 1.5 0.0 96.7 47.2 60.7 12.4 24.1
South Korea*** 79.8 83.3 9.3 0.0 36.5 72.6 84.0 34.5 20.0 17.9
South East Asia 91.4 37.5 55.5 9.7 7.2 89.7 37.2 47.5 24.7 35.0
West Coast of North America 80.6 47.1 65.2 2.4 6.1 86.2 41.0 61.7 19.0 48.0
North West Europe 99.3 48.8 72.8 8.0 8.6 95.0 42.4 55.8 33.3 51.9
Indian Subcontinent 91.9 54.5 71.4 8.6 0.0 98.9 51.1 55.9 28.2 36.8
Central Mediterranean 98.2 54.9 34.1 12.6 11.2 100.0 52.9 38.8 40.6 57.2

*Exclude services calling exclusively at Hong Kong, Shanghai or Shenzhen.

**Exclude services calling exclusively at Kaohsiung.
***Exclude services calling exclusively at Busan.
Developments in Container Port Competition in East Asia 175

Source: Computed by the authors.

176 W. Y. Yap et al.

Table 9. Share of slot capacity calling at major Mainland Chinese ports by trade
route and major regions
Shanghai Shenzhen Qingdao Tianjin Xiamen Ningbo

1995 2001 1995 2001 1995 2001 1995 2001 1995 2001 1995 2001

Trade route:
Transpacific 2.8 20.4 6.2 47.9 2.4 4.7 2.3 3.9 0.1 10.5 0.0 5.5
Intra-East Asia 17.8 22.2 2.2 2.4 9.1 8.6 10.9 12.8 4.4 8.0 2.9 6.0
Europe–Far East 11.3 40.6 12.1 61.1 4.0 22.0 11.5 10.2 0.0 16.2 0.0 23.7
East Asia–South 4.2 10.3 0.0 8.5 0.7 14.5 1.0 7.3 2.3 4.0 0.0 4.9
East Asia

Major region:
South East Asia 9.7 24.7 7.2 35.0 1.5 11.3 5.2 8.3 0.6 7.6 0.0 11.0
West Coast of 2.4 19.0 6.1 48.0 2.2 4.6 2.2 3.6 0.0 10.2 0.0 5.6
North America
North West 8.0 33.3 8.6 51.9 2.8 18.7 8.2 9.2 0.0 13.2 0.0 20.1
Europe
Central 12.6 40.6 11.2 57.2 6.0 12.1 9.4 12.0 0.0 21.8 0.0 16.2
Mediterranean

Data are percentages.

Source: Computed by the authors.

instead of transhipping at Hong Kong, Busan and other major ports in East Asia.
For instance, Xiamen and Ningbo grew from having very little or no connectivity
to the major trades and regions in 1995 to account for significant portions of those
markets in 2001. Generally, ports in Southern and Central China registered bigger
increases in market share than ports located in North China.
The inauguration of direct calls by shipping services at Mainland Chinese ports
also had the effect of reducing the slot capacity share of Japanese and Taiwanese
ports (Table 10). This was due to the increasing number of new services started by
shipping lines that bypassed Japan and Taiwan altogether (Table 11). While 12
services bypassed Japan and Taiwan in 1995, there were 18 in 2001. However, a
significant number of mainline services connected to China continued to call at
these countries. Tables 10 and 11 also show that most of the services continued to
opt to call at Hong Kong.
The economic boom of Mainland China prompted shipping lines to reorganize
their service schedules and ports-of-rotation to exploit the growing traffic density
and to achieve greater network economies. Ports that did not generate sufficient
gateway volumes to warrant direct calls were dropped. The most dramatic reduc-
tions in slot capacity share were those experienced by Keelung and Tokyo. For
instance, Keelung saw its share of slot capacity connected to North West Europe
reduced from 23% in 1995 to almost zero in 2001, while slot capacity connecting
Tokyo to the Central Mediterranean was reduced from 25 to 5% in the same
period. Keelung was also dropped from almost all the shipping services connect-
ing to North West Europe. The services that dropped Keelung included both of
Evergreen’s round-the-world services, Hanjin’s reorganized pendulum services,
K-Line and Yangming’s Japan service, and MSC and Norasia’s Europe–Far East
services. As for Tokyo, the reorganization of joint services operated by Evergreen
and Lloyd Triestino and Maersk and Sealand resulted in a loss of connectivity of
 Developments in Container Port Competition in East Asia 177

Table 10. Share of slot capacity calling at major ports in Japan/Taiwan by trade
route and major regions
Kaohsiung Keelung Kobe Nagoya Tokyo Yokohama

1995 2001 1995 2001 1995 2001 1995 2001 1995 2001 1995 2001

Trade route:
Transpacific 61.3 58.1 24.3 12.6 55.5 38.3 42.6 22.6 24.3 14.6 48.5 36.7
Intra-East Asia 13.0 18.9 11.6 14.5 32.5 23.2 18.9 15.2 24.5 20.4 32.7 19.6
Europe–Far East 62.8 46.8 10.2 0.0 37.0 25.6 33.1 19.7 16.4 9.0 21.3 11.4
East Asia–South East Asia 44.2 38.5 48.8 36.0 30.2 22.8 30.8 23.0 19.6 26.9 30.8 29.0
Major region:
South East Asia 55.5 47.5 34.6 18.0 34.2 22.2 31.8 21.9 18.8 13.7 30.2 21.2
West Coast of North America 65.2 61.7 24.3 10.2 46.1 33.0 42.6 26.2 28.8 20.5 44.0 34.0
North West Europe 72.8 55.8 22.6 0.4 35.6 31.2 36.0 32.3 23.8 13.4 27.8 17.0
Central Mediterranean 34.1 38.8 35.2 14.0 21.3 18.9 21.3 18.5 25.1 4.7 32.2 29.3

Data are percentages.

Source: Computed by the authors.

Table 11. Mainline services calling at Mainland China bypassing Japan and
Taiwan, 2001
Calling at:

Service Operator Trade route Hong Kong Busan

America Ships/Columbus/ Columbus, Lykes, Maruba, transpacific ✓ ✓

Maruba TMM
CHIPOLBROK CHIPOLBROK Europe–Far East ✓ ✗
CMA-CGM/CSCL/ CMA-CGM, CSCL, PONL transpacific ✓ ✓
PONL—PEX
CMA-CGM/Norasia/ CMA-CGM, Norasia, NSCSA Europe–Far East ✓ ✗
NSCSA—FAL
CMA-CGM/Norasia/ CMA-CGM, Norasia, NSCSA Europe–Far East ✓ ✓
NSCSA—NCX
COSCO COSCO Europe–Far East ✓ ✗
COSCO—China North COSCO transpacific ✗ ✓
COSCO/K-Line/ COSCO, K-Line, Yangming Mediterranean–Far ✓ ✗
Yangming—AMX East
CSCL CSCL Europe–Far East ✓ ✗
Evergreen/LT—CPX Evergreen, LT transpacific ✗ ✗
Grand Alliance—4 Hapag-Lloyd, MISC, NYK, Europe–Far East ✓ ✗
OOCL, PONL
Grand Alliance—CKX Hapag-Lloyd, MISC, NYK, transpacific ✗ ✓
OOCL, PONL
Maruba Maruba transpacific ✓ ✓
MSC MSC Europe–Far East ✓ ✓
New World Alliance—CEX APL, HMM, MOL Europe–Far East ✓ ✗
New World Alliance—NEX APL, HMM, MOL Europe–Far East ✓ ✗
Sinotrans/United Hanjin, Senator, Sinotrans Europe–Far East ✓ ✗
Alliance—CEX
Zim/Norasia Norasia, Zim Mediterranean–Far ✓ ✓
East, transpacific

Source: Informa (2001–02).

178 W. Y. Yap et al.

Tokyo with the Central Mediterranean. Nonetheless, the New World Alliance, K-
Line and Yangming restored this connectivity in 2002. Interestingly, both ports
had low transhipment incidences ranging from 7 to 10% in 2001.
The magnitude of reduction was less severe for other major ports in Japan and
Taiwan. The effect of developments in Mainland Chinese ports also had little
impact on the South Korean port of Busan as the port generally maintained its
market share on the major trades and regions. Part of the reason could be attrib-
uted to the port’s efforts in recent years in boosting transhipment traffic.
However, Busan appeared to face a greater threat from Kwangyang, another
South Korean port bent on increasing its transhipment traffic.
Hence, strong economic growth in East Asia in the earlier decades helped tradi-
tional hub ports such as Hong Kong, Busan and Kaohsiung to register high levels
of container throughput. However, the pace of economic expansion for these
economies slowed towards the end of the 1990s. On the contrary, China contin-
ued to exhibit significant growth momentum that generated sufficient cargo
volumes to attract direct calls by mainline shipping services. This enabled many
Chinese ports to enjoy record throughput growth. However, the low tranship-
ment incidences registered by these ports suggest that much of the cargo
remained local in nature. Although these ports are likely to remain as gateway
ports in the next few years, the economic development of China’s interior prov-
inces will continue to spur strong container-handling performance. Coupled with
investments in terminal capacity, this development might induce shipping lines
to shift their transhipment activity from the incumbents to these upstarts. The
1990s saw Japanese ports losing the bulk of their transhipment traffic to Hong
Kong, Kaohsiung and Busan. The first decade of the 21st century might witness a
similar situation for Kaohsiung and Busan. These ports might loose the bulk of
their transhipment traffic to Mainland Chinese ports. As shown by the research
findings, although shipping services continued to call at these ports, their market
share on the major trade routes and regions have declined between 1995 and
2001. The coming decade will probably see ports such as Shanghai, Shenzhen,
Kwangyang, Qingdao and Ningbo vie with the incumbents for a greater share of
transhipment traffic in East Asia.

Impact from Industry Developments

Heaver et al. (2000) present a schematic showing the diversity of the container
shipping industry reflected in the different industry players with their various
objectives, tools and possible impacts. In reality, players with which container
terminals interact extend beyond those listed, and their strategies and payoff
matrices will continue to influence and be influenced by key industry develop-
ments. In view of this, this section explores the impact on inter-port competition
in East Asia with respect to three major industry developments.

Concentration within the Liner Shipping Industry

The top 20 liner shipping companies operated and chartered 4.0 million TEUs of
vessel capacity in 2001, representing 71% of the world container fleet. The respec-
tive figures for 1995 were 2.0 million TEUs and 54%. These carriers adopted
different growth strategies with the hope of offering services that are frequent,
punctual, reliable and safe to shippers (Slack et al., 1996). The various strategies
 Developments in Container Port Competition in East Asia 179

adopted ranged from mergers and acquisitions employed by Maersk Sealand,

Evergreen, CMA-CGM and Canadian Pacific Ships (CP Ships) to the formation of
shipping alliances chosen by COSCO, NYK, K-Line, OOCL, HMM, Hapag-Lloyd
and Yangming. Other shipping lines such as P&O Nedlloyd, Hanjin, APL and
MOL used a mix of both strategies, while the Mediterranean Shipping Company
(MSC), China Shipping and Pacific International Lines (PIL) relied almost exclu-
sively on organic growth. However, all lines are engaged in various degrees of
slot sharing and chartering arrangements. The objectives that motivate concentra-
tion within the liner shipping industry have been summarized as follows
(Gardiner, 1997; Midoro and Pitto, 2000; Sheppad and Siedman, 2001):

● Increase frequency of services offered across multiple trade routes thereby

enabling the set up of a ‘one-stop centre’ with worldwide coverage.
● Obtain network economies via vessel planning and coordination on a global
scale.
● Diversification of risks and investment.
● Reap scale economies through the deployment of larger and newer vessels that
can lower cost and offer better utilization.
● Allow entry into new markets without the need to deploy additional tonnage
but rather through slot sharing agreements with member lines.
● Increase bargaining power that can force down the cost per TEU of container
handling, feeder and intermodal services.
● Stimulate new cargo and divert traffic from competitors.

Theoretically, such arrangements were supposed to allow shipping lines to

provide more service schedules connecting to a wider range of ports vis-à-vis
competing carriers. However, evidence provided from the perspective of market
shares accounted for each of the top 20 lines in the major regions and trade routes
connected to East Asia were mixed (Table 12).
CP Ships, which formerly did not operate in East Asia, and China Shipping
benefited the most from these arrangements. Both saw their market share
increase in all regions and for all trades where they had slot capacity deployed.
Smaller carriers, such as NYK, K-Line, OOCL, HMM and Hapag-Lloyd, came up
next with market share increases registered for most of the regions and trades.
The magnitude of increase was smaller for Evergreen, MSC, COSCO, CMA-
CGM, MOL and Yangming, while Maersk Sealand, PONL and Hanjin saw
mixed performances with a market share expansion in some areas and a decline
in others. Only APL appeared to be worse off from these arrangements, suffer-
ing a market share decline in most of the major regions and trades connected to
East Asia.
In East Asia, concentration within the liner shipping industry appeared to
benefit mainly the smaller carriers within the top 20 shipping lines, although this
development allowed shipping lines to reorganize their services to capitalize on
the booming Chinese port traffic while at the same time to call directly at more
ports in the region. Altogether, mainline services offered by the top 20 shipping
lines called at 35 ports in the region in 2001, seven more from 1995.2 However, as
with research findings presented below, these direct calls had the effect of
reducing the market shares of Japanese and Taiwanese ports while increasing
those of Chinese ports (Table 13). The share of South Korean ports, other than
Kwangyang, was also reduced.
 180

Table 12. Change in market share for the top 20 shipping lines connected to East Asia (%)*
Region, 1995–2001 Trade route, 1995–2001

South West Coast of North West Central Intra-East Europe–Far South East
Rank, 2001 Shipping line East Asia North America Europe Mediterranean Transpacific Asia East Asia–East Asia
W. Y. Yap et al.

1 Maersk Sealand −3.0 −4.2 −2.1 11.5 −2.2 −1.9 −7.0 −1.3
2 PONL 6.5 10.0 −7.9 −4.6 7.5 −0.6 −20.9 1.6
3 Evergreen −3.6 14.9 −0.1 −3.2 3.6 6.6 5.0 13.0
4 Hanjin 3.7 −3.4 6.6 7.5 −1.5 −2.8 8.8 1.7
5 MSC 1.4 1.7 3.3 6.5 1.5 0.0 4.0 0.0
6 APL −2.7 −4.0 −5.1 1.7 −7.7 −0.4 −11.2 2.0
7 COSCO 2.1 9.2 5.0 8.5 9.0 −7.7 5.3 −0.6
8 CMA-CGM 0.2 −0.6 7.3 4.1 6.6 −0.5 9.5 −0.9
9 NYK 3.3 7.2 6.1 11.6 4.1 0.5 5.8 −1.9
10 CP Ships 5.8 8.5 10.5 24.5 7.6 0.0 8.7 0.0
11 K-Line 4.7 2.5 1.0 9.1 4.0 1.5 −0.4 6.4
12 MOL 5.5 5.3 4.4 −7.2 1.8 −1.2 1.1 1.9
13 OOCL 8.2 −1.4 6.8 19.6 −5.9 0.2 8.1 −0.5
14 HMM 8.6 12.1 13.8 1.7 11.5 −0.1 10.3 5.9
15 ZIM 0.0 7.4 −4.4 3.0 9.1 0.0 0.0 −0.8
16 Hapag-Lloyd 4.4 8.8 2.7 9.0 7.5 0.0 5.5 −0.2
17 Yangming 1.4 −1.8 0.6 −8.0 5.4 2.5 8.0 12.9
18 China Shipping 7.4 7.8 9.3 27.9 8.3 4.2 11.4 3.2
19 CSAV 6.1 10.3 9.2 32.0 9.6 0.0 8.7 0.0
20 PIL 2.5 0.0 0.0 0.0 0.0 0.0 0.0 5.3

*Figures in bold show market share increases exceeding 5%.

Source: Computed by the authors.
 Developments in Container Port Competition in East Asia 181

Table 13. Share of slot capacity deployed by mainline services at major ports in
East Asia
Change from Change from
Port 2001 (%) 1995 (%) Port 2001 (%) 1995 (%)

Hong Kong 89.5 −0.6 Xiamen 12.3 12.2

Kaohsiung 52.5 −9.3 Osaka 11.9 −11.3
Shenzhen 49.1 40.0 Ningbo 11.6 11.6
Busan 41.2 −4.6 Qingdao 10.4 7.5
Kobe 33.6 −8.6 Keelung 9.0 −12.7
Shanghai 28.1 20.7 Hakata 8.0 −3.7
Tokyo 27.2 −11.8 Tianjin 7.1 3.4
Yokohama 26.6 −6.9 Shimizu 3.8 −12.4
Nagoya 25.8 −13.2 Dalian 2.4 −0.4
Kwangyang 12.7 12.7 Naha 1.8 0.4

Source: Computed by the authors.

Emergence of Mega-terminals and Global Terminal Operators

In 2001, the four largest ports in East Asia handled 40 million TEUs, a 3.5-fold
increase from 1990. While Kaohsiung saw its container traffic double, Shanghai’s
container throughput expanded 14-fold! As for Hong Kong and Busan, both ports
witnessed a 3.5-fold increase in containers handled. The ability to handle the
increasing container traffic was made possible by continuous investments in
terminal capacity. The four ports expanded terminal capacity by 29% to 45 million
TEUs between 1999 and 2003 (Table 14). With plans to boost capacity by another
25% to 57 million TEUs in 2010, these ports aim to remain as the regional gateway
and transhipment centres and to retain their top positions in the league of
container ports in the world.
The emergence of international specialized container terminal operating
companies equipped with financial, technological and managerial expertise
potentially allow local ports to surmount their deficiencies vis-à-vis the leading
ports (Heaver et al., 2001). Although many ports in East Asia lacked such exper-
tise, booming container traffic arising from buoyant economic performance and a
stable political climate in the region enabled these ports to attract investment
from international terminal operators. Before 1997, global terminal operators
were present in 15 ports (Table 15). Since then, the number of ports in the region

Table 14. Planned capacity expansion of the largest container ports in East Asia
(TEU)
Port 1999 2003 2010 Increase from 1999 (%)

Hong Kong 17 500 000 19 080 000 21 200 000 21.1

Busan 6 500 000 8 540 000 11 705 000 80.1
Kaohsiung 7 200 000 10 000 000 12 000 000 66.7
Shanghai 3 790 000 7 500 000 11 600 000 206.1
Total 34 990 000 45 120 000 56 505 000 61.5

Source: Ocean Shipping Consultants (2001, 2003).

182 W. Y. Yap et al.

Table 15. International terminal operators in East Asia*

Before 1997 New operators since 1997

Port Terminal operator Port Terminal operator

Dalian PSA Corporation Chiwan Modern Terminals Ltd

Gaolan Hutchison Port Holdings Daxie China Merchants Holdings
Hong Kong COSCO Pacific Fuzhou PSA Corporation
CSX World Terminals Guangzhou PSA Corporation
Hutchison Port Holdings Inchon PSA Corporation
Modern Terminals Ltd Kitakyushu PSA Corporation
Jiangmen Hutchison Port Holdings Kwangyang Hutchison Port Holdings
Jiuzhou Hutchison Port Holdings Mawan China Merchants Holdings
Kaohsiung APM Terminals Ningbo Hutchison Port Holdings
Kobe APM Terminals Busan Dubai Ports International
Nanhai Hutchison Port Holdings Hutchison Port Holdings
Qingdao COSCO Pacific Qingdao P&O Ports
Shanghai COSCO Pacific Shanghai APM Terminals
Hutchison Port Holdings Shekou Modern Terminals Ltd
Shantou Hutchison Port Holdings Tianjin Dubai Ports International
Shekou P&O Ports Vostochny Dubai Ports International
Xiamen Hutchison Port Holdings P&O Ports
Yantian COSCO Pacific Xiamen Dubai Ports International
Hutchison Port Holdings Yantai Dubai Ports International
Yokohama APM Terminals Zhangzhou China Merchants Holdings

*Ports in bold reflect the presence of international terminal operators since 1997.
Sources: Websites of various global terminal operators and media reports.

with the presence of global terminal operators has almost doubled. The majority
of their investments were targeted at Mainland Chinese and South Korean termi-
nals. Apart from the four largest global terminal operators in the world, East Asia
also attracted a host of other terminal operators that include Modern Terminals
Ltd, Dubai Ports International and China Merchants Holdings to expand their
presence in the region. Hence, participation by global terminal operators in the
emerging ports enabled them to pose credible threats to the incumbents by the
closing of efficiency and service gaps. In the near future, East Asia might witness
the entry of players from other fields with the relevant mix of competencies into
the container terminal operating business.

Increasing Vessel Size and Diversity

Vessels calling at East Asian ports have increased in size and diversity (Table 16).
The Europe–Far East trade experienced the largest increment with average vessel
size rising by 63% to 4754 TEUs in 2001 from 1995. This was followed by the East
Asia–South East Asia (56%) and transpacific (30%) trades. The widest range of
vessels deployed, ranging between 670 and 7500 TEUs, was also seen in the
Europe–Far East trade. Hence, apart from receiving calls from the largest container
vessels currently deployed, the region also handles calls from small vessels.
Gilman (1999) suggests that capital and operating costs of larger vessels could
be lowered if these ships can operate with adequate load factors and do not incur
 Developments in Container Port Competition in East Asia 183

Table 16. Size of vessels calling in East Asia (TEU)

1995 2001

Change from
Trade route Average size Range Average size Range 1995 (%)

Transpacific 2569 290–4950 3344 120–6600 30.2

Intra-East Asia 337 30–1554 426 42–1560 26.4
Europe–Far East 2913 180–4800 4754 670–7500 63.2
East Asia–South East Asia 690 20–1703 1078 50–4411 56.2

Source: Informa (1995–2002); websites of various shipping lines.

additional time in port. The deployment of mega-container ships might also

require that container terminals be constructed in completely new locations
(Peters, 2001). In order to substantiate the magnitude of infra- and super-struc-
tural investments required, Peters urged the need for both shipping lines and
terminal operators to work together. Notwithstanding the validity of these postu-
lations, future hub ports in East Asia should expect and be able to handle not only
larger vessels, but also a wider range of vessel sizes. This will pose challenges to
efficient terminal design and operation.

The Near Future

The next decade will see ports in East Asia placing greater emphasis on logistics
and intermodal concerns, capitalizing on economic opportunities from China,
exploiting the possibilities presented by information and communication techno-
logical advancements, having a greater environmental awareness, and working
on possible cooperation and collaboration with competitors.
Logistics and intermodal capabilities allow ports to safeguard and enlarge their
hinterland to deal with the ‘foot-loose’ nature of container shipping lines. In this
business aspect, ports are already faced with increasing competition from ship-
ping lines and other logistics players in East Asia. The near future could see
greater vertical and horizontal integration attempts as logistics service providers
actively expand on their business scope to capitalize on the economic opportuni-
ties presented by China. The realization of China’s economic potential will also
rely to a great extent on continued efforts to upgrade and invest in new port and
intermodal infrastructure to ensure that the growth momentum is maintained.
Frankel (1998) noted that China is expected to exceed Japan’s trading volume and
value in 2000 and 2010, respectively. It will also exceed the USA’s foreign trading
volume and value in 2012 and 2020, respectively.
Frankel (1999) also proposed that information and communication technology
(ICT) would increasingly allow for central control and coordination of the whole
network flow of the global supply chain. This might result in centralized ICT
controls within the region. However, it remains to be seen whether an ICT control
centre established in a port can help to entrench its hub status. The near future
will also see a greater awareness for environmental issues in East Asia. The inten-
sity of port competition could have devastating long-term consequences on the
environment, which the current generation might not live to see the full impact.
Although green groups play an important role in alerting society to the potential
184 W. Y. Yap et al.

harmful effects of particular port projects, different derivation and interpretation

of environmental costs and benefits and other considerations by opposing parties
could impede a port’s competitive potential. The future of inter-port competition
in East Asia will therefore depend in part on the port’s ability to harness the
support and resources of green groups.
On the possibility of cooperation and collaboration between competing ports,
Lam (2002) proposed such a conceptual model that suggested that ports should
seek cooperation strategies in the face of increasing bargaining power of shipping
lines, fierce intra- and inter-port competition, larger vessel size, and intermodality
concerns. Lam’s empirical research on Yantian and Hong Kong found that both
ports generate positive effects on each other’s container throughput. Yap and Lam
(2004) further presented a framework for analyzing inter-container port relation-
ships and emphasized the positive gains that could be offered by port complemen-
tarity as strategic alternatives to enhance a port’s competitive position.

Conclusions and Recommendations for Further Research

Appendices 1 and 2 summarize the developments of port competition in East
Asia. This was done by looking at the development of load centres on the two
main container shipping routes serving the region, which are the Europe–Far East
and transpacific trades. On the Europe–Far East trade, a significant share of slot
capacity calling at the ports of Shenzhen, Shanghai, Ningbo and Qingdao served
as an indication of their emerging hub port statuses. On the transpacific trade,
however, the bulk of slot capacity continued to call at traditional transhipment
hubs, although Shenzhen and Shanghai attracted a significant share of this
market. Putting the two schematics together, the near future would most likely
see Hong Kong, Shanghai, Shenzhen, Busan, Kaohsiung, Kobe and Tokyo being
the load centres in East Asia. In the next decade, one could expect Kwangyang,
Qingdao, Ningbo, Xiamen and Kitakyushu to enter the foray to vie for the posi-
tion as East Asia’s premier gateway and transhipment centre.
Inter-port competition in East Asia is expected to intensify as the gravity of
cargo volumes shifts to Mainland China. The competition might result from the
concentration of their bulk of services by shipping lines at the primary load
centres. These primary load centres will compete intensely with ports located in
close proximity that share their hinterlands (e.g. Hong Kong versus Shenzhen,
Busan versus Kwangyang, Shanghai versus Ningbo, Qingdao versus Tianjin,
etc.). Shipping lines will also likely rationalize their calls at Japanese ports to a
few load centres instead of the current arrangement of serving all five of the major
ports. While these developments could lead to intense competition based on
prices and service levels, opportunities are also presented for ports to cooperate
to serve better the general economic interests of their hinterland.
As ports are just a single node in the international logistics chain, they have to
bolster their hub position continuously by forging closer links with their hinter-
land. Ports will have to respond to global trends or risk being sidelined. As there
will be ports that dread the challenges offered by these trends, there will also be
proactive ones that anticipate these challenges and exploit them in their favour.
The research findings are based largely on evidence supplied by container ship-
ping services calling in East Asia. The merits of this approach have been
discussed, although the perspective offered could be complemented with other
information sources and perspectives. This includes information on container
 Developments in Container Port Competition in East Asia 185

throughput handled by region and trade route, financial data, operational data
and general economic impact. At the time of writing, very few ports in East Asia
supply such data. Furthermore, the rigor of statistical methods could not be
applied due to the paucity of data points. Hence, future research on this issue to
address these concerns should offer deeper insights into the inter-port competi-
tion dynamics played out in East Asia.

Acknowledgements
The authors thank the anonymous reviewers for useful comments. W. Y. Y.
stresses that the views presented do not represent those of his organization.

Notes
1. In 2001, the European Union consisted of the following Member States: Austria, Belgium,
Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, Sweden and the UK.
2. The seven ports were Hitachi, Inchon, Kwangyang, Matsuyama, Ningbo, Taichung and Ulsan.

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Appendix 1

9% Dalian 4%
12% Tianjin 10%
34% Tokyo 23%
0% Kwangyang 13%

21% Yokohama 11%

45% Busan 39%
33% Nagoya 20%
4% Qingdao 22%
16% Osaka 9%

37% Kobe 26%

11% Shanghai 41%

0% Ningbo 24%

0% Fuzhou 0%
0% Xiamen 16%
12% Shenzhen 61%
99% Hong Kong 94%
The % on the left of
each port is the %
share of slot capacity
in East Asia in 1995.
EUROPE-FAR EAST
10% Keelung 0%
TRADE ROUTE
Keys:
Bold Those ports typed in bold were load centres in 1995.
63% Kaohsiung 47%
Highlighted Those ports highlighted in grey were
load centres in 2001.
The % on the right of
each port is the % Six ports, namely Hong Kong, Busan, Kaohsiung, Kobe,
share of slot capacity
in East Asia in 2001.
Nagoya and Tokyo, were load centres in both 1995 and
2001. They are typed in bold and highlighted in grey at the
same time.
Developments in Container Port Competition in East Asia 187
Appendix 2
188

0% Dalian 2%
2% Tianjin 4%
44%   31%
0% Kwangyang 13%
W. Y. Yap et al.

49%    37%

43%
 41%
43%  23%
2% Qingdao 5%
24%   15%
56%  38%
3% Shanghai 21%

0% Ningbo 6%

0% Fuzhou 0%
24% 
 13%

  
0% Xiamen 11%
Keys:  Those ports typed in bold were load centres in 1995.
6% Shenzhen 48% 61% 
 58%
Those ports highlighted in grey were
Highlighted load centres in 2001.
84%   87%
The % on the left of The % on the right of Seven ports, namely Hong Kong, Busan, Kaohsiung,
each port is the % each port is the %
share of slot capacity share of slot capacity
Kobe, Nagoya, Yokohama and Tokyo, were load
in East Asia in 1995. in East Asia in 2001. centres in both 1995 and 2001. They are typed in bold
and highlighted in grey at the same time.