Ports & Cities: New OECD Report on Complex Relationship

Monday, September 23, 2013

The main question is: are ports still drivers of urban growth, and how can this effectively be achieved? This issue is tackled in the OECD's recent report 'Competitiveness of Global Port-Cities. Brief extracts follow:

Many economic benefits are associated with well-functioning ports.
They lower the costs of trade, generate value added and employment and attract certain economic sectors. Doubling port efficiency of two countries is found to increase their bilateral trade volume with 32% as indicated by an earlier study. One tonne of port throughput is on average associated with USD 100 of economic value added, and an increase of one million tonnes of port throughput is associated with an increase in employment in the port region of 300 jobs in the short term. Moreover, ports are associated with innovation in port-related sectors. Nine out of the 10 world regions with the largest amount of patent applications in shipping are home to one or more large global ports, including Houston, Los Angeles/Long Beach, Tokyo, Oakland and Rotterdam.

Many benefits from ports spill over to other regions

Firms in other regions also benefit from efficient ports when exporting and importing, and links with other sectors mostly take place outside the port region. Less than 5% of the economic linkages with suppliers take place in the port or the port-region, with a larger share in the main economic centre of the country, which could be relatively far away from the port, e.g. Ile-de France for the ports of Le Havre and Marseille; and Bavaria and Baden- Württemberg for the port of Hamburg.

Ports also have negative impacts
These impacts can be very substantial; e.g. more than half of the SO2-emissions in Hong Kong are related to shipping, and a third of the land surface of the city of Antwerp consists of its port. In addition, port truck traffic accounts for more than 85 % of total truck traffic on some sections of the highways in Los Angeles. Most of these negative impacts are localised, taking place close to the port area (in terms of noise and dust) and in the metropolis (for air emissions, water quality, congestion and land use). This represents what can be called the port-city mismatch: the combination of benefits spilling over to other regions and localised negative impacts. How to solve this mismatch?

Models to enable cities to reap benefits from their ports
Maritime services clusters try to attracted high value added services related to the maritime industry, such as maritime finance, consulting, law and engineering services. Industrial development related to ports has traditionally taken place because many industries are interested in being close to imported resources and consumer markets. Waterfront development has frequently managed to capitalise on port and maritime heritage and transform this into a source of urban growth.

The full report is available for download in PDF at: http://www.oecd.org/gov/regional-policy/Competitiveness-of-Global-Port-Cities-Synthesis-Report.pdf


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