CTR Home Internal  Relations and Communications Home About CTR Publication Schedule CTR Archives
THURSDAY REPORT ONLINE

February 7, 2002 Geographer Brian Slack studies the globalization of world shipping

 

 


Brian Slack

Alliances have transformed port service over the past five years: Brian Slack

Photo by Andrew Dobrowolskyj


by Frank Kuin

Newly formed corporate shipping conglomerates have set off a scramble for survival among the world’s leading container seaports, says Brian Slack, a geography professor at Concordia.

Globalization in the international shipping industry has led to the formation of a handful of powerful alliances in recent years, comparable to those in the airline business, he explained. Slack has been researching the effects of this development in North America, Europe and Asia.

These “very large corporate structures” are able to “throw their weight around” to win concessions from seaports that are eager to remain regional hubs on the most traveled international routes, he said.

“Since the carriers have come together in alliances, they have had to choose between ports,” Slack said. As a result, “there’s been a tremendous rationalization of port service in the last five years.”

For example, Maersk, the Danish industry leader which has absorbed the American shipping line Sealand, had several ports on the east coast of North America “roll out the red carpet” a couple of years ago when it was deciding where to take its business.

Both Baltimore and Halifax lined up extensive subsidies and endorsements from land carriers (such as railways) in bids to become Maersk’s North American hub — only to find Maersk taking these offers to the port of New York as a bargaining chip.

As a result, “Maersk won very significant benefits from the port of New York, including lower rates than the port authority probably wanted to offer,” Slack said. Moreover, “they convinced the port authority to arrange for dredging” to accommodate larger ships — a very expensive proposition.

“This is what the big shipping lines can do now,” he said.

The struggle among seaports is one of the focal points in a broad research project about the effects of globalization on the international shipping industry, undertaken by Slack in cooperation with two colleagues at the Université de Montréal and Saint Mary’s University in Halifax.

Slack and his co-researchers have conducted mail surveys and in-depth interviews with people in the industry on the east coast of North America, in Western Europe and in Asia. Specifically, they have traveled to Norfolk (Virginia), Rotterdam (the Netherlands), Singapore, Hong Kong and Shanghai (China). In addition, they have hooked up with a French colleague of the University of Le Havre, who has been researching the same theme.

“People in other academic fields are speculating about the effects of globalization on the shipping industry,” Slack said. “We had an opportunity to provide some real, primary evidence of what these changes have meant in terms of services, vessels and ports.”

Slack and his colleagues have documented large increases in the size of ships in the last number of years. “There’s been nearly a doubling of size,” he said. As well, shipping route networks have emerged spanning the entire globe, rather than carriers focusing on just the Atlantic or the Pacific Ocean.

Montreal still an important player


The port of Montreal was not considered in the project because, as Slack said, “it’s not part of this globalization; it occupies a niche market.”

Though a significant container port on routes between Europe and the Great Lakes area, Montreal is in a unique position due to its great distance to the ocean, limited depth of water and the need for ships to be ice reinforced. As a result, “the big international shipping lines are not interested in coming here,” Slack said.

“Montreal will continue to be an important player on routes between the Northeastern U.S., Canada and Europe,” he said. “What Montreal will never be is a port engaging significantly in traffic to other markets, such as Asia.”