Towards a Port Demand Management (PDM) System: An Analytic Hierarchy Process (AHP)-based Approach

Abstract

Egyptian ports are grappling with challenges to cope with the intense port competition in the Eastern Mediterranean region. Accordingly, policy makers are investing heavily to increase port capacity and subsequently the services calling Egyptian ports and the cargo handled. Nevertheless, investments in port capital infrastructure and their ongoing maintenance costs are substantial; and while they are intended to attract shipping lines, other factors may ultimately drive their port selection, potentially rendering these investments ineffective.

This research utilizes the Analytic Hierarchy Process (AHP) to provide a better understanding of the factors that attract port users to a particular port and pioneers the introduction of the Port Demand Management (PDM) concept as envisioned by the authors. Under PDM, policy makers could alter the port selection decisions of port users, such as cargo owners, shipping lines, shipping alliances, and/or consignees, through a programme of rewards (penalties) to attract (repel) them to (from) a certain port aiming at reducing port congestion without the need to pump huge infrastructure investments.

The findings reveal that, among carefully selected six factors and 19 sub-factors, shipping lines prioritize port efficiency, connectivity, and information technology when selecting a port of call and show that focusing only on port infrastructure development is inadequate. Instead, investing in non-physical (i.e. soft) infrastructure is necessary for supporting the port system effectively.

This research spotlight underappreciated factors of port selection considering the unique characteristics of the Egyptian context and pave the way towards new strategic directions for policy makers.