Demand-Driven Port Development



Olaf Merk, Administrator Ports and Shipping International Transport Forum


Some statements are too banal to be repeated; yet, repeated they are. How often we hear in yet another conference on the dire prospects of shipping that “the market should decide” – as if these market decisions would be the solution rather than the main cause of shipping’s current problems.

A variant of the unconditional faith in the wisdom of markets is “demand driven development” – and this is what I would like to focus on here. People seem to mean very different things when they mention demand-driven development – some interpretations make sense, but some are outright dangerous. I will illustrate this with the case of port development. At the heart of it all are two related but subtly distinct questions: who are the clients of ports – and who is driving demand for ports?

Ports tend to think that shipping companies are their main clients – and often deduct from it that shipping is driving port demand. But this is obviously not true. Ports without ships are meaningless, but so are ships without cargo. The ultimate reason to develop ports is to stimulate exports or imports, not to satisfy shipping companies. However, most ports are very attentive to the demands of their customers – too attentive. Sure enough, not providing satisfactory services could mean that shipping companies call another port. But it is one thing to adapt to customers’ demand, yet another thing to take shipping’s demands as the basis for port development.

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