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Trilateral competition in a single market The
case of the River Plate Port Range
Annual Conference of the International
Association of Maritime Economists 2006 Ricardo
J. Sánchez Gordon Wilmsmeier Austral
University Osnabrück University,
Argentina Germany ECLAC/UN, Santiago, Chile
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Melbourne, July 2006
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Thematic Framework

• River plate port range
• River system of the Parana, Uruguay and
• River Plate
• Population of ca. 23 mill.
• Ports of Buenos Aires, Uruguay (Montevideo)
• and river ports, as well as Rio Grande as next
• port on the ECSA
• Region end point of ECSA main services
• Overlapping hinterlands, esp. because of
• inland shipping possibilities
• Performance of ports at two points in time
• 1999/2000 and 2003/2004
• Regions economic crisis
• Port devolution processes
• Roles of ports in the regional container port
  network

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Theoretical approach

• Matching Framework
• Originates from the literature of theory of
  organization and strategic management (Baltazar
  and Brooks 2002)
• Analyse performance of port organizations in port
  devolution processes
• Based on environment-structure-strategy triangle
• Different configurations determine the (fit)
  organisational performance

ALTERNATIVE CONFIGURATIONS OF ENVIRONMENT,
STRATEGY AND STRUCTURE IN THE MATCHING FRAMEWORK
Fuente Baltazar and Brooks (2003)
We adapt the theoretical framework from static to
dynamic
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Limitations

• Approach works in the comparison of two ports
  with same characteristics, but faces
  restrictions, if the geographical setting is not
  continous like in the case of the three ports
  under study
• Montevideo (MVD)
• Buenos Aires (BUE)
• Rio Grande (RIG)
• Geographical setting is decisive for the
  ubication within the liner shipping network
• Hinterland configuration
• Only partly competitive
• Hinterland of one port rather protected for
  competition
• Addition use the concept of intermediacy and
  centrality to explain competition

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Results from the matching framework

• Development 1999/2000 ? 2003/2004
• Environment
• Development towards a more complex and more
  dynamic environment, and higher uncertainty in
  the case of Buenos Aires, but toward less
  uncertainty for MVD and RIG
• Strategy
• All ports rather effectiveness oriented, however
  BA and RIG develop from an efficiency oriented
  strategy
• All ports move from a focus on the delivery on
  basic services to a focus on peripheral services
• Structure
• in MVD and RIG structure evolves from mechanistic
  to organic/mechanistic, BA in opposite direction
• All ports are characterized by decentralized
  decision-making

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Fuente Notteboom and Rodrigue (2005)
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River Plate Basin Market Share () and total
container throughput, 1996-2004
Source Authors based on primary information from
the ports of Buenos Aires, Montevideo and Rio
Grande
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Transhipment activities 1999-2004, TEU
Source Authors based on primary information from
the ports of Buenos Aires, Montevideo and Rio
Grande
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Index of port container movements
(TEU),1996-2004, base year 2001
Source Authors based on primary information from
the ports of Buenos Aires, Montevideo and Rio
Grande
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Fuente Notteboom and Rodrigue (2005)
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Shipping services in River plate Port Range
Source Authors based on liners shipping
information
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Interport Competition in a single market

• Varying reasons for competition and port
  performance
• Montevideo relatively small Uruguyan hinterland
• Buenos Aires in its development focused on
  intraport competition
• Rio Grande has to cope with significant trade
  imbalance
• Geographic location in the liner shipping network
  puts Montevideo and Buenos Aires in a peripheral
  position
• Rio Grande has a protected, but significant
  hinterland towards the other two ports.
• Cabotage restrictions put limit on Rio Grande to
  act as a regional hub, but yet has gained
  significant strength
• Rio Grande struggles to capture bulk trade
  besides container trade
• Rio Grande hinterland access impeded by missing
  road and rail infrastructure

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Vessels and TEUs deployed in international liner
services involving South Americas East Coast
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Conclusion and future research

• In a competitive environment, where each port
  operates under a different institutional set up,
  we found that ports perform differently depending
  on the
• Environment
• Strategy and
• Structure
• However the geographical position adds a
  significant factor in this competitive
  environment
• This position can be strengthened or weakened by
• Economic performance of the ports hinterland
• Cabotage restrictions in maritime transport
• Spatial layout and access of the hinterland

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Gordon Wilmsmeier 49 521 400
2449 Wilmsmeier_at_aol.com
Many thanks
Ricardo J. Sánchez Economic Affairs Officer
ECLAC United Nations Organization 56 2
471-2131 Ricardo.Sanchez_at_lycos.com Ricardo.Sanche
z_at_CEPAL.org