This week, Irina from Cohort 4 shares her port cities essay.
Antwerp has a rich and dynamic history that spans several eras, including periods of prosperity and decline. It has played an important role in international trade since pre-modern times, serving as a gateway for arts, products, and other commodities to France, Spain, Morocco, and Portugal. After the Napoleonic Wars, Antwerp regained its status as a major trading centre and port in 1811. Today, the port of Antwerp is a leading global port in Europe, second only to Rotterdam in terms of the number of services provided, cargo transportation, and handling.
The paper explores the challenges of globalisation that Antwerp, a major break-bulk European port city, faced during the last two decades of the 20th century. To provide a more comprehensive understanding of Antwerp’s innovation efforts, a comparative analysis with Rotterdam, another major European port city, is necessary. By benchmarking Antwerp’s competitiveness against Rotterdam, we can gain insights into the strategies that both cities used to adapt to the changing global economic landscape. The analysis focuses on the period from 1980 to 1990, which marked the beginning of the current globalisation era (Krugman, 1995; Bisley, 2007, p. 23).
The first main idea is that port cities are often considered the driving force behind globalisation due to their crucial role in each link of the supply chain and their proximity within the agglomeration economies (Peck 2003; Scott 2001). Starting in the 1980s, many challenges faced by port cities were a result of the global value chains (GVCs), including the need to provide cheaper transportation costs and services for larger transhipment of goods. To maintain their competitive edge on both a regional and global level, ports needed to effectively implement new technologies such as containerization.
During the 1960s, the introduction of containerisation gave containerised cargo a comparative advantage over traditional breakbulk cargo. As a result, many port cities began to focus on the spatial restructuring of their facilities and infrastructure to accommodate the new containers (Paardenkooper, 2014, p.29). Antwerp was no exception, and in 1966, container terminals were added to the port’s infrastructure. However, several other factors that affect the efficiency of freight handlings, such as specialised terminals, investment, and labour specialisation, were not initially taken into account (Notteboom, 2003, p.125).
This evidence highlights the importance of infrastructure in maintaining competitiveness in the global market. Antwerp’s failure to implement successful container handling facilities and keep up with the demands of the global supply chain resulted in a decrease in port selection criteria. While the port implemented its first container terminal in the 1960s, it did not keep up with the innovation tactics of other ports, which affected its role in the European port hierarchy. Despite an increase in inward throughput during the 1980s, the outward throughput did not increase at the same rate, and the port’s rate of containerised cargo remained stagnant for over a decade. This suggests that infrastructure played a significant role in determining a port’s ability to stay competitive in the global market.
Another supporting piece of evidence is related to labour specialisation. During the 1980s and 1990s, the stevedoring and naties companies in Antwerp were still relatively independent and dispersed. This prevented the necessary labour specialisation needed to handle the increasing number of container cargoes and reduce handling times. As container ships became more prevalent, the need for specialised stevedoring labour became more pressing, as it would speed up the loading and unloading process (Vanfraechem 2012, 152).
The lack of innovation in labour organisations on the docks affected Antwerp’s economic attractiveness and foreign direct investment (FDI) flows, which had a decisive impact on the city’s economy (Van Hamme and Strale 2011, 88). While port agents were initially satisfied with a large pool of all-round dockers, the lack of labour specialisation weakened the port’s commanding and strategic functions, reducing its competitiveness in the global market (Vanfraechem 2012, 155).
The insufficient infrastructure, coupled with a lack of specialised labour, was partially a result of the predominantly public ownership of the port facilities (Vanfraechem 2012, 154; Van Hamme and Strale 2011). This dependency on public ownership led to issues with investment and slowed down the port’s functional shift to new technologies, which decreased levels of cargo flow (Zondag 2010, 181). Containerization was an unattractive investment for the authorities, not only because it required substantial funding for new equipment and large ships, but also because the port structure had to be changed by building docks. Additionally, containerization was a form of automation that was not very attractive to Belgian naties. The absence of investment in cargo handlers due to public ownership of the port facilities became another drawback in the port’s throughput capacity, causing Antwerp to lose competitiveness in the 1980s (Meersman et al. 2008, 12; Vanfraechem 2012, 145).
To further support this statement, it’s important to note that the adoption of containerisation not only made shipping more efficient but also had significant effects on global trade and the distribution of economic power. The standardisation of container sizes and the ability to transfer them seamlessly between different modes of transportation (ships, trains, trucks) facilitated the globalisation of trade and allowed for the rise of new economic powerhouses such as China (Brooks and Cullinane 2007, 76-77).
In contrast to Antwerp, Rotterdam’s response to the containerisation revolution was more proactive. In the 1960s, the port of Rotterdam took a more ambitious approach and began building specialised container terminals, which allowed for larger and more efficient handling of cargo. This investment in infrastructure and labour specialisation allowed Rotterdam to take advantage of the growth in containerisation, and by the 1970s, Rotterdam had become the largest port in the world in terms of container throughput (Notteboom 2003, 126).
It is worth mentioning that containerisation has become a key driver of growth for many ports worldwide, as it allows for faster and more efficient movement of goods through the supply chain. As a result, ports that have invested in container handling infrastructure and services have seen increased trade and economic growth (Notteboom and Rodrigue 2005).
Also, Rotterdam’s stevedoring companies were able to adapt to the new form of labour organisation and structure, which was more specialised and efficient. This was achieved through a policy metamorphosis that encouraged more permanent and financially dependent stevedoring jobs. As a result, the number of stevedoring firms in Rotterdam was reduced, leading to a more efficient and specialised workforce (Vanfraechem 2012, 154). This is in contrast to Antwerp, which relied on a large pool of all-round dockers who were not specialised in container handling (Vanfraechem 2012, 155). This deepening of labour specialisation is a result of the rising influence of Global Value Chains (GVCs), as noted by Ali-Yrkkö and Rouvinen (2015, 72).
In addition to the deepening of labour specialisation, Rotterdam’s success in container handling was also due to its innovative approach towards investments in technological and infrastructural upgrades. Unlike Antwerp, where public funds were heavily relied upon, Rotterdam’s port municipality actively encouraged port agents to invest in infrastructure, making investments company-dependent rather than relying on public funds. This approach not only led to a more responsible working environment but also increased the return on investments. Consequently, there was an unrestrained flow of funds towards technological and infrastructural innovation. The municipality’s role was limited to building only the maritime infrastructure for new docks and quays (Vanfraechem 2012, 154).
The role of port cities in the globalisation process has been extensively studied in the academic literature. However, a new approach in the port cities research is to assess port competition through container infrastructure adoption, which is linked to supply chain logistics and directly affects the compatibility of the port activity (Zondag 2010, 179). This approach focuses on the changes in Antwerp’s transportation infrastructure, specifically the implementation of container ships and terminals, between 1980 and 1990 to increase port capacity. While the research is limited in terms of the time frame and the maritime scope of the research question, it is essential to consider that the future of Antwerp’s port goes beyond the Scheldt estuary. The implementation of containerization has proven to be a significant factor in the economic success of port cities, leading to increased efficiency and cost savings. A comparison with Rotterdam, Antwerp’s long-standing competitor, highlights the importance of vertical integration of labour and the adaptation of new forms of labour organisation and structure. The success of Rotterdam’s port can be attributed to the proactive role of port agents in attracting private investment, leading to unrestrained funding for technological infrastructure innovation. The future success of Antwerp’s port will depend on its ability to adapt to changing market demands and maintain its position as a significant player in the global supply chain.
As the global economy continues to rely on global value chains, the competition among ports has shifted from the traditional maritime business to a competition in connectedness. While terminal infrastructure remains a necessary factor for a port’s attractiveness, it is no longer sufficient. The importance of hinterland connectivity has become more critical than ever, and port cities must adapt accordingly. As Notteboom notes, intermodality was just a concept at the beginning of the era of containerization, but now it is an essential aspect of a port’s competitiveness (2003, 118, 154). The competition between port cities has become more sophisticated, and it now involves the competition between global value chains. Antwerp’s focus on reactivating the Iron Rhine reflects its efforts to enhance its hinterland connectivity, which could be crucial for its future competitiveness (Meersman et al. 2008). As global trade continues to evolve, port cities must continue to adapt to remain competitive and relevant in the global economy.