Environmental Performance as a Port Selection Criterion

Abstract

Maritime transport is the largest mode of transport and the container segment in particular has grown strongly in the last two decades. Many ports compete against each other to attract containers and this study analyzes whether ports use environmental performance as a competitive differentiator. The key players who decide to which ports containers are shipped openly advocate their efforts to reduce environmental impacts. With regard to freight transport, their focus on reducing environmental impacts is on Green House Gas (GHG) emissions, and this could imply that ports with relatively low GHG emissions will become preferred ports for these key players. However, these key players who select the port of choice, especially the large retailers and 3PLs, take the whole supply chain into account when addressing environmental impacts. The impacts of handling containers within ports are relatively small compared to the overall supply chain impacts and the environmental performance of the ports is consequently not expected to become a decisive port selection criterion. The key players that make the port selection decision are increasingly including environmental issues when selecting carriers for their transport needs. From a commercial perspective, ports are therefore recommended to ensure that there are adequate ‘green’ transport options between the port and its hinterland.