Maritime Economics & Logistics, 2008, 10, (330–333)

r 2008 Palgrave Macmillan All rights reserved. 1479-2931/08

www.palgrave-journals.com/mel

BOOK REVIEW

World Shipping and Port Development

Tae-Woo Lee and Kevin Cullinane (eds.)
Palgrave: MacMillan, 2005, ISBN 1-4039-4753-8

Maritime Economics & Logistics (2008) 10, 330–333.

doi:10.1057/palgrave.mel.9100157

The volume, edited by Tae-Woo Lee and Kevin Cullinane, brings together a
variety of important contributions in the wider area of maritime economics and
port economics. All the chapters, written by some of the most active and well-
known researchers in the discipline, are characterised by clarity, originally of
approach, and academic rigour. The aim of the editors, at least according to what
is stated in the introductory chapter, is to attempt to analyse at least a part of the
present and future developments that are of interest to, or have an influence on,
the world’s shipping and port industries. Lee and Cullinane certainly reach their
goal by condensing in a rather concise volume a deep overview of all the major
topics that animate the debates of maritime economics and port economics.
The comprehensive nature of the work can be appreciated already from the
introductory chapter that provides an overview of the contributions.
The first contribution (chapter 2) by Mariner Wang, provides a description
of the developments of containerised transportation in Asia. With an abundance
of data and historical references to the political and economic events that have
shaped the Far eastern scene in the last two decades, Wang highlights the
characteristics of container growth in this important region of the world. In
addition, the author provides an overview of the changes taking place in the
emerging economies of East Asia and the expansion of port capacity, reasoning
on why the strong position of East Asia in the global container transportation
market is expected to be fairly stable.
With the contribution of Yoshida, Yang and Kim (chapter 3), the attention
shifts from the container transportation developments to the industrial
organisation of the liner shipping industry, analysing with great detail the
representative case of Japanese liner shipping companies. The focus of the
contribution lies in the network economies and related advantages obtainable
through alliance formation. From the Japanese case it appears that the route
network, the number of port calls and the network scale play a determinant role
in the formation and success of alliances.
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The contribution of Gong, Firth and Cullinane (chapter 4) dwells on the

important issue of shipping finance and deals with the approach to the analysis
of financing methods in the shipping industry. After a theoretical introduction to
the neoclassical finance theory approach, the authors advocate an approach
based on transaction cost economics (TCE). They argue that the TCE approach
is particularly appropriate in the case of shipping finance because asset
specificity, the characteristics of the shipping market and the specific nature of
the seekers and providers of finance are essentially transactional characteristics.
Haralambides and Yang (chapter 5) address the flagging decision of
shipowners and analyse in detail the situation in mainland China. Cost
reduction considerations, especially with respect to crew costs, are identified by
the authors as the main reason for flagging out, also in China. The contribution
is interesting not only because of the controversial subject it deals with and the
policy implications it describes, but also because its findings are obtained by
extensive surveys and through the use of fuzzy set theory.
Transport policy is also the subject of the contribution by Sophia Everett
(chapter 6). The chapter analyses the relation between deregulation,
competitive pressure and the emergence of intermodalism in the port sector.
The contribution deals with the implications of deregulation in the rail and port
sector of Australia. With accurate analysis and a case study, the author shows
that the increased competition as a result of the reform process has provided
new incentives for rail and port operators to reinvent themselves and become
increasingly involved in the provision of integrated logistics services.
Chapter 7 by Mary Brooks deals with one of the important trade-offs in
contemporary port policy: the compatibility of devolution initiatives and the
regional development goals of local authorities. The contribution stresses that
good corporate governance at the port level needs to consider the alignment of
broad commercial objectives with community economic development objec-
tives. The question expressed in the title of the article – whether good
governance and ports as tools of economic development are compatible –
remains though unanswered, as, by admission of the author herself, further
research is needed on the topic.
Alfred Baird (chapter 8) analyses privatisation trends in the world’s top one
hundred container ports. His analysis is based on surveys carried out by Napier
University and IAPH. After a brief summary of the extensive findings of the two
surveys, Baird concludes that there does not appear to be a single, common,
standard approach to port investment and port privatisation. Even though the
role of the private sector has been increasing, especially in port operations and
services, the public sector still takes an important interest in the port system.
The quality of a hub port in logistics terms is the subject of the contribution
of Song and Lee (chapter 9). The authors analyse the changing characteristics of
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hub ports, juxtaposing the concepts of logistics hub and load centre. The
concept of ‘quality of hub ports’ has become more complex as the new logistics
dimensions interact with the traditional port functions. The contribution
represents an interesting example of the extensive emerging literature on the
increasing importance of logistics in ports.
The paper of Jose Tongzon (chapter 10) is the ideal continuation of the
previous one, as it analyses the key success factors of the transhipment hub of
Singapore. Next to a unique geographical position, key factors are considered to
be the ability of Singapore to satisfy its customers in terms of quality of service
and efficiency, as well as the effective, pragmatic and forward-looking policies
of its government. Furthermore, Tongzon argues that the position of Singapore
will be difficult to undermine, for its world-class reputation as an efficient port
with well-established links with major shipping lines and other ports give it a
strong incumbent advantage.
In chapter 11, Kunio Miyashita presents another two examples of successful
hub ports: Kobe and Osaka. The perspective taken in this contribution, though,
is the logistics strategy and the management options open to the two ports.
From the econometric model estimated in the paper, the author concludes that
the optimum outcome would be reached in a situation where the two ports
would merge under a single management team and where the logistics strategy
adopted would be one developed considering the joined interests of the two
ports. The practical implications of such a strategy are also analysed,
acknowledging the infeasibility of such a solution in the short term and in
the Japanese context.
A critical analysis of the European port pricing and financing policy is the
topic of chapter 12 by Haralambides, Verbeke, Musso and Benacchio. The
authors make use of the findings of the EU ATENCO study, which they carried
out earlier, and emphasise the general consensus of the port industry on the
importance of cost recovery, acknowledging at the same time the little
consideration usually given to the practical obstacles of cost-recovery pricing
in a European context. The authors discuss the limitations of marginal cost
pricing in ports, correctly pointing out that such a pricing discipline is neither
necessary nor sufficient for achieving the EU objective of a level playing field in
the port industry. They conclude that the way forward involves the compilation
of better and more harmonised statistics on port costs, the adoption of
standardised port accounting systems, greater transparency of port accounts
and of financial flows.
The final chapter, by Cullinane, Cullinane and Wang moves the attention
back to China in an attempt to provide a hierarchical taxonomy of container
ports and the implications of their development. The contribution consists of a
detailed description of the historical key developments taking place in the
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Chinese container ports, and an analysis, region by region, of the present

facilities and trends. The authors argue that the present development trends are
expected to continue at least until 2010, characterised by injections of foreign
investment and expertise, increases in productivity levels and an improving
integration of the port system with the land based freight transportation
infrastructure. The authors also identify the major potential influences, namely
the individual and combined impact of the WTO membership on the volume
and nature of trade flows, the level of cooperation between ports, and the
improvements in transportation infrastructure.
With its main geographical focus on, but not limited to, Asia, the book
proves to be a comprehensive synthesis of some of the most stimulating
examples of research on the most recent developments in the maritime and port
sectors. Every chapter is rigorously referenced and the volume includes an
index and the short biographies of the authors. With these characteristics, the
book shows to be, if not an essential item in the library of every maritime
economist, at least an enjoyable and inspiring reading for those who are
interested in analysing the contemporary developments of the maritime and
port industries, within a rigorous and original framework.

MICHELE ACCIARO
Center for Maritime Economics and Logistics (MEL), Erasmus University,
Rotterdam, The Netherlands.
E-mail: acciaro@few.eur.nl

Maritime Economics & Logistics