Making city ports competitive

OECD Observer

With 90% of external trade volumes transported by ship, port-cities stand as symbols of globalisation. Indeed, this has been so since ancient times: French economic historian Fernand Braudel has stressed the historical link between ports, urban development and the birth of the capitalist market economy. 

In this magazine, Wolfgang Michalski has described the great history and development of Hamburg and its linchpin role in Germany’s economy.

However, while cities such Hamburg, or Osaka-Kobe, or Shanghai, have been able to flourish thanks to their ports, others have not reaped the benefits, with ports merely playing a role of gateway for their country, such as Le Havre for Paris.

But ports can become economic drivers in their own right, according to The Competitiveness of Global Port-Cities. Singapore, for instance, is now a maritime logistics hub, with 5,000 maritime establishments, a workforce accounting for 5% of Singapore’s national employment and an output that accounts for 7% of GDP. 

The report identifies three main determinants for port competitiveness: extensive maritime forelands, effective port operations and strong hinterland connections. This can be achieved through the creation of freight lanes, such as the Alameda Corridor, which connects the port of Los Angeles and Long Beach to US transcontinental railways.

A key issue for port-cities is how they can increase their local benefits. The report recommends three models: maritime service clusters, industrial development and port-related waterfront development. Another option is economic diversification to reduce the dependence on the port.

The Competitiveness of Global Port-Cities also points to downside risks, particularly for the environment: more than a half of the sulphur dioxide emissions in Honk Kong, China, are related to shipping, but also to land use, traffic congestion and security, affecting the well-being of local populations. Policies to address these issues are key for making ports competitive in the long run.

OECD (2014), The Competitiveness of Global Port-Cities, OECD Publishing.

Wolfganf Michalski, “Globalisation and the resilience of a city”, in OECD Observer No 290/291, Q1-Q2 2012

©OECD Observer No 301, Q4 2014

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