A multivariate analysis of the total port-hinterland logistics cost from the users' perspective

Ports are always an important component of maritime trade, and the performance of the port increasingly impacts the maritime transport costs and shipping operation costs both directly and indirectly. Directly the ports contribute to the cost through various port dues and charges, while indirectly they contribute through underperformance. Moreover, port performance and port cost are considered the most important determinants of port choice by users such as shippers, forwarders, shipping lines and port service providers. Therefore, a comprehensive analysis of cost in ports from a logistics point of view considering both the port performance and port choice is required, which has rarely been studied in the existing port management literature. To fill this gap, this research analysed the total logistics cost (TLC) in ports and their hinterland by identifying its determinants and analysing their influences. It focused on the impact of the most critical determinants on the reduction of TLC through a trade-off analysis among the determinants and the components of the TLC. It tried to establish a relationship between the least TLC and CO2 emission reduction, indicating that TLC reduction can impact sustainable port-hinterland operation from an environmental perspective. Therefore, the intention of this study was to achieve the least total port-hinterland logistics cost for the users. This helps port users to identify the main TLC components and determinants, assess the influence of the different determinants, examine the role of critical determinants in minimising the TLC and better understand the interrelationship between TLC and CO2 emission.
To achieve the above intention, this research first conducted a critical review of the port logistics system, port performance and port choice and discussed how the port logistics system improves the port performance and influences the port choice. This enabled examination of the port logistics system by developing the TLC function which includes the critical port performance indicators and port choice determinants and offers a comprehensive performance measurement tool. At the same time, it explains how the enhancement of port logistics performance, through minimising the TLC, can improve the port performance and subsequently influence the port choice. It is worth mentioning that the development of the TLC function takes container operations into account. Regardless of the characteristics of the cargo, standardised containerssignificantly impact on the cargo handling times, speed, accuracy and reliability of liner services, leading to a seamless movement of goods, facilitating door-to-door services along supply chains. Therefore, a comparison of various services in different port-hinterland container transport systems around the world shows them to be widely standardised and comparatively generalised in forming the total logistics cost function.
In the second stage, the TLC for sample ports was calculated and the functional relationship among the different cost components were analysed. Later, the multivariate analysis of the port-hinterland logistics cost was conducted. This quantifies the influence of the possible determinants of the TLC including port efficiency, port infrastructure, maritime and hinterland connectivity, port governance, other logistics services and customs, and other port management and operational indices including macro-economic factors. This identifies the areas for improvement to enhance the logistics performance of ports and minimise the TLC. The relevant data were collected from different secondary sources such as UNCTAD, the World Bank, Lloyd’s list and the official websites of ports. The findings help port users, service providers and policymakers to understand the influential factors of the port-hinterland TLC and corresponding areas of improvement.
In the third stage of this research, the impact of the most critical determinants on the port?hinterland TLC were further analysed in a case port and its hinterland through the implementation of some simulation-based scenarios. This enables understanding of the trade-offs among different determinants as well as the cost components and identifies a possible solution for minimising the TLC. The relevant data were collected from different schedules, guidelines, policies, statistics of traffic and performance and annual reports of the selected port and its hinterland. Finally, the interrelationship among the TLC in ports and hinterland and environmental sustainability in port-hinterland transport operation from the perspective of CO2 emissions is established. It indicates that the least TLC in ports and hinterland can also impact the CO2 emissions reduction.
Overall, the research contributes by identifying the least TLC solution for using the port-hinterland transport service. It formulated the TLC function in ports and their hinterland, identified the influential determinants, analysed the impact of the determinants as well as the cost components of the TLC and established the interrelationship between the least TLC and CO2 emissions reduction. Port users can apply the TLC approach in their decision-making process by conducting trade-offs among critical determinants and TLC components, while the port authority and policymakers can identify the areas of improvement for performance enhancement and user satisfaction