Peripheral challenge in container port system: A case study of Pearl River Delta

Abstract

The growth of peripheral ports to dominant hubs has been well documented in North America and Europe, and has led to the elaboration of several theoretical models. However, although changes in containerization growth have been taking place in the South and East Asia in recent years, particularly in China, only a few studies have focused on this region. The Pearl (Zhujiang) River Delta (PRD) has a typical port system with hub and peripheral ports, and provides an excellent case for studying the Peripheral Challenge. This paper introduces the theoretical evidence of the Hayuth model and analyzes the evolution of the container port system in the PRD with five phases: 1) phase I: preconditions for change and phase II: initial container port development in the 1970s and early 1980s; 2) phase III: diffusion, consolidation, and port concentration in the middle and late 1980s; 3) phase IV: the load center in the 1990s; and (4) phase V: the Peripheral Challenge since the late 1990s. The results illustrate that the Shenzhen port presents mounting challenges to the Hong Kong port, descending from a transshipment hub of China to a regional load center of Southeast China. Furthermore, this paper explores five points that have led to the evolution of the port system in the PRD: 1) competition in the regional port systems; 2) different interested parties; 3) shift of investment strategies of international terminal operators; 4) integration of shipping networks and reorganization of carriers; and 5) cost-based competition.