planning the city around the port: maximizing synergies ... · gautam patel,visiting professor,...

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Abstract

Ports around the world have developed over the years owing to a number of growthdrivers. In many cases, one of the key growth drivers seems to be the city surrounding theport. The authors in this paper throw the light on the questions like how vital is the cityalong with its economy and population base to the port’s growth, whether primary growthimpetus for some of the leading cities of the have come from their ports; Have theythrived to the same degree had they not been ports? How crucial is the role of a port ina city’s growth? If it is indeed crucial, could we leverage the presence of a port in a townor settlement to grow it into a large city and finally into a megapolis, eventually minimizingthe conflicts and synergizing the benefits?

1. INTRODUCTION

Cities provide a number of key functions that support ports. They provide portemployees with vital social infrastructure ranging from residential accommodationto schooling, recreation and leisure. They provide career and employmentopportunities to members of the family not employed by the port. Further, citieshelp develop, and sustain a number of services required by the port. These couldbe in the nature of shipping agents and liner services, logistics and transportservices, warehousing, ship chandelling and ship repair, provision of coreinfrastructure such as power, roads, and municipal supply and so on. Empiricalevidence suggests that availability of these services along with manpower supportis crucial functions of a port city that can influence the growth of the portsubstantially.

Thus, even if the business rationale for the port i.e. industries, mines or othersources which drive the port’s cargo are located outside the vicinity of the portinto the deeper hinterland, there exists sufficient reasons for the port to requiresustaintely and in degrees benefit from the presence of a supporting town. Similarly,ports have led the growth of many cities, the most notable being London. While weshall examine some specific instances in detail later, it is sufficient to say thatcircumstances in which the port contributes to the city, and the different ways inwhich it does so, are neither fully understood not fully investigated. Irrespective,between the port and the city, it is akin to the chicken and egg situation.

H.M. Shivanand Swamy, Professor and Associate Director, CEPT University, Ahmedabad.

Gautam Patel,Visiting Professor, CEPT University, Ahmedabad.

Planning the City around the Port: MaximizingSynergies and Minimizing Conflicts

H.M. Shivanand Swamy, Gautam Patel and others


Institute of Town Planners, India Journal 7 - 3, 77 - 87, July - September 2010

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2. PORT AND THE CITY

Verlaque (1979) was the first to ask whether the port develops the city and itseconomic activities, or whether the city was the engine of port expansion. Goss(1990) summed up this classic chicken and egg situation by answering this questionsaying that ‘it served no useful purpose to ask which function came first, or aremore important; they go together’. Valega (1983) further proposed the theory oninteraction between port growth and local economic diversification even thoughport and urban dynamics remain of a different nature.

Jean-Paul Rodrigue explained that the different phases of port city growth,progressing from the initial setting of small port city with general cargo to theregional setting with bulk and container cargo equipped with freight distributionand logistics services. He showed how the small lateral quays of a small town portprogresses to the improvisation stage whereby the docks are built further awayfrom the CBD to accommodate large demands for space for cargo handling. Thismay further result in the abandonment of the old port site and its redevelopment(see Fig. 1).

Port city settings have been noted as having changed spectacularly. According toNas (2005) ‘the most spectacular transformation occurred at the end of thenineteenth century, when city and port began to separate’. According to Nas portsfunctioning earlier as the heart of their citiesbecame detached as transit ports divorced fromurban life and eventually turned into distantindustrial sites ignored or left derelict by thecity.

It was Hoyle (1998), however, who more clearlybrought out the different stages of theevolution of a port city. Bulk of the work onport cities have focused on port and relatedindustrial area redevelopment. He showed thatthe height of the port city was in the mid 20thcentury whereby modern industrial port citiesreached the peak of their maritime andindustrial prowess. This was however followedby a phase of retreat, redevelopment of thewater front from 1960s to the 1990s and thenthe renewal of the port city linkages morerecently through the forces of globalization,networking and inter-modalism.

Path followed by port-cities in theirevolutionary journey tended to arise largely

Fig. 1 Port City Interface Sea Land Interface



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from the change in the role of ports as passenger and cargo gateways to their roleof a node in the integrated transportation chain. A progressively higher percentageof cargo transforming itself into containererised loads has resulted in aneconomically driven need to accommodate larger ships and be technologicallyequipped to deal with these larger loads. As a result, ports have tended to demandhigher disproportionately higher share of land resources from the port city. Ondenial, they have turned to other suitable locations along the water front but awayfrom the city, leaving earlier port areas derelict.

Movements to reclaim these derelict waterfronts through revitalization of dockareas to create high standard commercial and residential spaces have occupied theattention of both researchers and policymakers, particularly with respect toEuropean ports.

Asian ports, and those in many emerging markets, however, are theoretically at anearlier stage of their evolutionary journey. Some, such as the Middle Eastern,Chinese and East Asian Ports, have over the last two decades leveraged their locationin trade intensive areas through adoption of technology, capital intensivedevelopment, and robust managements, to emerge as the bulk of the world’s largestports. This is brought out in Fig. 2, displaying the 75 largest ports of the world,selected through a union of the world’s top 50 ports in terms of total tonnage andin terms of total container cargo1.

Fig. 2 Largest Ports of the World

1 The implication being that there are 25 common ports in each list. The data used forcreating the list of top 50 ports was cargo in the year 2006.



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In light of the experiences of (pre-dominantly) the European ports, it becomespertinent to ask if there are any lessons for the emerging Asian port cities. Couldsome of the issues of port-urban conflicts over land and waterfront resources beminimized? And could there be integrated pro-active planning to leverage emerginglocal and international leaderships in trade and agglomeration economics bymaximizing port city synergies?

Port city theories, particularly by Hoyle, seem to point to possibilities of highsynergies between port and city if the development is planned to be complimentaryrather than independent or conflicting. However, light needs to be thrown at thearea of consideration and criteria for such planning. In order to do so, it is firstnecessary to examine the relationships between ports and cities, whereby we dothe following:

• Examine association between World cities and presence of ports in these cities;

• Examine the relationship between size of city and nature of cargo at its port;

• Identify specific port cities that have seen dramatic growth and understandtheir growth drivers; and

• Try and draw lessons from the above exercise in terms of implications for portcity planning and leveraging.

2.1 Association between World Cities and Ports

A global city or world city is a term used to describe cities which control adisproportionate amount of global business. The term dates to its use by PatrickGeddes’ in 19152, but was properly explained and developed first by Saskia Sassen(1991 and 2003). Sassen pointed to New York, London and Tokyo as examples ofWorld Cities. Loughborough University (1999) based GaWC (Globalization and WorldCities) Study Group developed a concept to identify strategic geographical locationsthat play an important role in the ongoing process of globalization. The criteria,upon observation, appear to be designed to test as to which city has exploitedagglomeration economics better. It deduced a 12 points scale out of dozens ofcriteria and classified them as follows:

On examining these cities by putting them on a map, it is realized that most ofthese cities are located on the coast. This in itself is not surprising since water wasthe primary mode of transport earlier and a coastal location ensured maximumefficiency in exploiting modal economics. What is however interesting is that ofthe 10 alpha cities (Table 1), only one (Milan) is not a port-city, all 10 Beta citiesare port cities and 24 of the 35 Gamma World Cities are port cities. Further, of the45 of the total 55 World Cities which have ports, eight cities have ports which areamong the top 50 ports of the world. While the above evidence gives away nothing2 Doel, M. & Hubbard, P., (2002), “Taking World Cities Literally: Marketing the City in aGlobal Space of flows”, City, vol. 6, no. 3, pp. 351-368.



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in respect of cause-effect relationships, there does seem to be a high associationbetween ports and successful cities (if becoming a World City can be called asuccess).

2.2 Relationship between the Size of City and Nature of Cargo at Its PortIn order to further investigate the role of ports in the growth of cities, and viceversa, another exercise was carried out by ranking the top 50 ports of the world (interms of total tonnage) population wise. The ports were divided into several classesbased on population size of supporting towns/cities as given below. The cargo ofthese ports was then examined to understand the key drivers of these ports. Thefindings are summarized in Table 2.

It was found that Australian Ports of Dampier, Port Hedland, Gladstone, Hay Point,and Dampier, ranking respectively 25, 28, 48 and 38 in the world had townpopulations only of a few thousand. Populations of nearby supporting towns orregions were also found to be relatively small.

While this in itself in not very surprising given Australia’s low population density,the fact brought out is that in an era of high automation, even ports that handle

Table 2 Ranking the Top 50 Ports of World in Terms of Total Tonnage

No. Population Class No. of Driver Commodities Economy Base of the(Million persons) Ports Town/City

A Below 0.1 9 Coal, Iron Ore (Dry Bulk) Basic Port activities onlyB 0.1 to 0.5 11 Dry Bulk, Liquid Bulk, Container Port activities, light industriesC 0.5 to 2.0 11 General, Bulks, Container Light to heavy manufacturing,

trade, tourism, educationD 2.0 to 5.0 10 General, Dry/Liq.Bulks, Break- Specialized industries, trade,

bulk, Container tourism, education, financialservices

E Above 5.0 9 All types of Cargo but Transport and logistics, financialpredominantly containers services hub, education, media

and entertainment, tourism,sports, and host of otherservices

Source: Authors Analysis



Table 1 Alpha, Beta and Gamma Cities

City Category Alpha Beta GammaClass Full service world cities Major world cities Minor world citiesScore 12,11,10 9,8,7 6,5,4No. of Cities 10 10 35Examples London, NY, Paris, SFO, Sydney, Toronto, Amsterdam, Atlanta,

Tokyo, Chicago, Zurich, Brussels, Bangkok, KL, Beijing,Frankfurt, Hong Kong, Madrid, Seoul, Istanbul, Rome, Miami,Los Angeles, Milan, Moscow, Mexico City, Shanghai etc.Singapore and Sao Paulo.

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large volumes do not need large manpower to operate them, provided of coursethe operations are not complex. The Australian Ports cited above, and in fact mostother ports in Category A such as the Brazilian Ports of Tubaroa and Itaqui werelargely driven by a single dry bulk commodity, (either coal or iron ore). Also, theywere serving the transport needs of mines located several hundred miles into thehinterland and had almost no local cargo. The operations were dictated by needsof single commodity and were not complex.

As one moved up the population ladder, the cargo became more diversified. Liquidbulk got added to dry bulk. Break bulk, which is more complex to handle, andrequires specialized skills, also made an entry in Category D. Most importantly, theproportion of container in total cargo mix increased. The economic bases of thesupporting towns also betrayed almost similar behavior, with their economiesbecoming more diversified, and progressing from manufacturing to the servicesled economies as the population increased. The economies of the large Megapolisrepresented in the final category (NY, HK, Shanghai, and Tokyo) were found to bedriven largely by an highly advanced form of services sector that included R&D,media, entertainment, and logistics besides trade.

It was evidenced that ports with complex operations, such as transshipment, shiprepair and shipping services hubs, container operations and associated logisticsrequired higher value addition at each stage and hence the complexities of theirinteraction with the immediate environment increased. They needed the immediateenvironment to provide a host of value added services, ranging from logistics hubs,transport services, ship repair, ship chandelling, bunkering, traders, shipping agents,etc. The availability of these services characterized advanced port cities.

The increasing proportion of containers represented diversified trade (sincecontainers contain a wide variety of value added and manufactured goods rangingfrom textiles, paper products, engineering goods, auto parts, electronic parts woodproducts and furniture, etc). Also it represented capability to handle increasinglycomplex operations that go with container handling such as capability toaccommodate as also handle larger ships, larger and specialized cranes, moderncontainer depot, modern warehouses and so on. Though the above study couldnot succeed in gathering evidence to this extent, it is very likely that proportionof the port cargo originating from the port city itself increased with increase incity size, since the local economies too diversified.

Thus, there are indications that with increase in city size, both the city and portbegin to contribute increasingly to each other’s growth. While large port citiesleveraged the presence of a port nearby by maximizing local trade and by providingvalue added services to the port, ports on their part benefited from the diversifiedcargo emerging from the immediate vicinity. These could create what could betermed synergy, since it renders an economically competitive situation for boththe port and city. It also does not mean conflicts



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To understand the significance of this indication, we may be reminded that portsdo not need a large city in its vicinity in order to thrive since, unlike say airports,port hinterlands can extend for hundreds of miles. However, despite this, a broadlinear relationship between the size of a port town and the diversity of cargo isobserved.

3. PORT CITIES, DRAMATIC GROWTH AND GROWTH DRIVERS

As the next stage of inquiry, it would make sense to further investigate the specifictriggers that set certain port cities on a high growth trajectory. Towards this, thefirst task was to identify specific port cities, which had seen high growth. A matrixwas developed for this purpose, which set population growth on one axis and portgrowth (in terms of total volume of cargo) on the other. The top 50 ports of theworld were then planted on this matrix, as represented by their population andport cargo status.

Port VL L M H VHCity (O-75 MT) (75-100MT) (100-200MT) (200-300MT) (>300MT)

Huntington- Itaqui Port HedlandVL Tristate0 - 0.1 Sepetiba Hay Point (Town) DampierMillions Mundra Richards Bay

GladstoneAlgeciras Santos Marseilles Rotterdam

L Corpus Long Beach Tubarao0.1-1 ChristiMillions Beaumont, TX Vancouver Kitakyushu

Le Havre Novorossiysk ChibaNewcastle Antwerp

Vishakapatnam Amsterdam Dubai Ports South Louisiana SingaporeKobe Port Kelang Qinhuangdao

M Osaka Inchon Nagoya1 - 5 Kaohsiung BusanMillions Hamburg

YokohamaUlsan

Kolkata Gwangyang New York/ Dalian NingboH New Jersey5 - 10 HoustonMillions Qingdao

Hong KongVH>10 Mumbai Tokyo Shenzhen Tianjin GuanghouMillions Shanghai

Table 3 Matrix 2006 Port Throughout



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In order to select cities, only those port cities were considered which fell on theright bottom of the matrix, as seen in the matrix below titled Matrix 2006. Thisallowed selection of only large cities with large ports, which make the analysismore meaningful. Once the cities were selected, the growth path of the selectedport cities was traced over 15 year intervals in their journey, namely in 1975, 1990and 2006. Based on this, those port cities which had seen dramatic movementsover one or both the axis, were identified. The journey of these identified portcities is shown in the Table 4. The port cities identified in this manner were Dubai,Ningbo, Singapore, Hong Kong, Dalian, Shenzhen and Shanghai. These port citieswere further studied in detail to understand the specific drivers that led to thislarge growth in port and city size.

3.1 Dubai

Dubai’s strategic location at the heart of the medieval sea trade and close to Indiaattracted many tradesmen. Tax breaks were offered as early as 19th Century. The

Table 4 Matrix 2006, 1990, 1975

Port EL VL L M H VHCity (0-25MT) (25-75 MT) (75-100MT) (100-200MT) (200-300MT) (>300MT)VL Dubai Port0 - 0.1Millions

NingboL0.1 - 1Millions

SingaporeDubai Port

Hong Kong SingaporeM1 - 5Millions

Dalian Ningbo

Dalian NingboH 5-10 Hong KongMillions Qingdao

Shenzhen Hong KongVH>10 Shenzhen GuangzhouMillions Shanghai Shanghai Shanghai

1975 1990 2006



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discovery of oil in 1966 was a major trigger for population and economy expansion.The population driven by migrants rose steadily from 30,000 in 1966 to 3 lakh by1980 and 14 lakh in 2007. Establishment of projects like Jebel Ali Port and FreeZone (1979) drove non-oil trade growth throughout the eighties and nineties. Thiswas followed by another phase of development from late nineties.

Dubai’s emirates long term goal of reducing reliance on oil exports revenue hasbeen realized with less than 6 percent of revenue from it. Real Estate andConstruction (22.6 percent), Trade (16 percent), port (15 percent) and financialservices (11 percent) are the largest contributors to Dubai’s economy now. DubaiPort continues to contribute largely to the city economy, through Jebel Ali Port (35km from Dubai), and number of free trade zones. Further, massive integratedplanning has kept away port – urban conflicts and land competitions so commonamong older ports. Overall, Dubai has leveraged its strategic location and oilrevenues through policies incentives and creation of large scale specializedinfrastructure to attract businesses and drive massive growth.

3.2 Ningbo

Ningbo is one of china’s oldest cities, dating back to 4800 BC, with sub-provincialpopulation around 6 million though it has always been a populous city/region. Thecity’s per capita output was $8,026 in 2007, more than three times the nationalaverage and very competitive to Shanghai’s $8,949. The City has a thriving economyof one trillion Yuan, driven mainly by manufacturing and transport.

The Port is situated at the mouth of the Yangtese river waterway, Ningbo is one ofthe world’s busiest ports, ranked 4th by tonnage, and 15th in TEU Within the last15 years. The port enjoys the most advantageous natural features of draft andshelter. Large ships up to 250,000 DWT can navigate freely. Ningbo (like Dalian) hasmoved up the charts of port traffic (from 50 MT to 300 MT plus) though has alwaysbeen very populous city. Growth of port has been driven by the highly exportdriven manufacturing model of Chinese growth.

3.3 Dalian

Dalian has sub-provincial population of 62 lakh, (31 lakh within city limits). Thecity economy is driven by a strong base of traditional industry, heavy and lightmanufacturing, retailing and IT. The city has been given the status of open city in1984. Considerable presence of MNCs in Dalian Development Zone including Canon,Mitsubishi Electric, Nidec, Sanyo Electric and Toshiba, and Intel. The city is alsotrying to re-invent itself by emphasizing on ITESs, BPOs similar to Bangalore throughinitiatives such as Dalian Hi-Tech Zone and Dalian Software Park along with policyand tax incentives.

Dalian is the largest petroleum port of china, with presence of refineries, dieselengineering, and chemicals around it. It is the country’s third largest port overall.



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It has emerged as an important distribution centre with Dalian Railroad Station,Dalian International Airport and two major express roads. The manufacturing andrefining businesses of Dalian have a strong relationship with the port. However,the city economy’s increased dependence on IT sector is helping it diversify awayfrom port led development alone

3.4 Other Port Cities

Among other cities, the growth of the Shenzhen port was driven by the burgeoningcity and region economy, which in turn had benefited from the classic Chinese SEZmodels. Singapore has leveraged its location through proactive policies fordevelopment of a unique port – city with a thriving container led hub port andmaritime culture. We may also add London to the list, since it was once the World’slargest Port and is still a Alpha World City. The matrix does not capture it since thetime frame of the matrix is shorter.

London was a centre of trade, finance, commerce and shipbuilding throughout the18th Century. Thames struggled to cope with the number of ships. By 19th Century,London was the world’s largest port. Many industries developed along the port,notably sugar refining, edible oil processing, cable manufacture, iron working,lead smelting, casting of brass and bronze, shipbuilding, timber, grain, cement andpaper milling, armament manufacture, vehicle manufacture (later). Trade continuedto grow until late 1950s. By 1960s, London faced increased competition from otherports as patterns of trade shifted. Huge container vessels replaced older ships andLondon’s docks could no longer adapt. Most of the trade at London city docks isgone.

In 2007, London still handled 52 m tons, (including 2 m teus, 18 m POL) almostequal to India’s largest ports. Operations have shifted to downstream docks toaccommodate bigger vessels. London owes much of its present day prominence toits status as once thriving port city. It also demonstrates that port cities, once theyhave attained a critical size, develop a momentum of their own irrespective of theport.

4. CONCLUSIONS

Based on the above discussions, it appears that port cities that have witnessedspectacular growth following a particular path of development whereby they startas small towns and single commodity driven ports to thriving metropolis with adiversified economic base. There may be number of variants in individual cases,but this appears to be the broad trend. Using the indications derived earlier, fivelevels of development scenarios of the port city can be developed, as gvien inTable 5.

It can be said that most world cities which are ports have reached Level 5. Examplesare London, New York, Singapore, Hong Kong, etc. Further, many of the Chinese



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port cities have reached levels 3 and 4. However, they are yet to evolve to highservice sector driven economies. However, the western cities became tertiary sectororiented since manufacturing moved elsewhere and overseas, substantial part of itto low cost manufacturing hubs like China.

Another key question is with regard to policy induced versus natural growth. A lookat the port cities that emerge from the matrix (as explained in para 2.2 above)shows a high dominance of Chinese port cities. These port cities have followed agovernment driven policy induced growth models. Implications of this are bigger interms of developmental strategies but it seems that ports have played a key role inthe growth strategies employed by the governments of these port cities. Thus, tosome extent synergistic growth seems to have been mobilized.

NOTE:

Other Authors include: Parthiv Soni, Harpal Dave, Nivesh Chaudhary, PankajSampat, Hitarth Arya and Surbhi Gupta; Master of Infrastructure PlanningStudents, CEPT University, Ahmedabad

Table 5 Fire Levels of Development Scenarios of Port Cities

Level Port Supportive City Characteristics

1. Trigger Commodities located in the hinterland Small settllement

2. Trigger Industry in the town Mining Trade

3. Exim industries in town Scattered / industrial complex / Manufacturing TradeSEZ / FTZ Container Traffic

4. Exim Industries, Containers, Port and Shipping Industries Manufacturing TransportShip reparing / building Port Services / Containers and Logistics Services SectorManufacturing

5. Mega-city with a well diversified economic base Transport and LogisticsFinancial Hub Strong ServicesSector R&D



planning the city around the port: maximizing synergies ... · gautam patel,visiting professor,...

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