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AJSL-239; No. of Pages 12 ARTICLE IN PRESS

The Asian Journal of Shipping and Logistics xxx (2020) xxx–xxx
H O STED BY Contents lists available at ScienceDirect
The Asian Journal of Shipping and Logistics

journal homepage: www.elsevier.com/locate/ajsl
Original Article
Developing a comprehensive approach to port performance

assessment
Okan Duru a , Cassia B. Galvao b,∗ , Joan Mileski b , Leo Tadeu Robles c , Amir Gharehgozli d
a
Nanyang Technological University, Singapore
b
Texas A&M University at Galveston, TX, USA
c
Universidade Federal do Maranhao – UFMA, Brazil
d
California State University, CA, USA
a r t i c l e i n f o a b s t r a c t
Article history: This paper investigates the port performance assessment and proposes a comprehensive framework
Received 5 April 2019 with various perspectives as well as priority distributions of stakeholders’ expectations in port busi-
Received in revised form 5 February 2020 ness and operations. One fundamental questions in port performance studies is how to evaluate and
Accepted 3 March 2020
quantify intangible indicators on performance. There are definitely inputs and outputs, which may be
measured and evaluated through conventional instruments. However, each instrument deals with a par-
Keywords:
ticular aspect of whole performance problem (e.g. port efficiency, port productivity,), and many of these
Port performance
instruments are limited to ‘measurable’ data on port management and operations. In this paper, these
Port stakeholders
Quality function deployment
two common problems are put under the scope, and a comprehensive port performance assessment
scheme is established by gathering various perspectives. Quality function deployment (QFD) approach
is preferred to formulize the problem and define priority ratings of expectations by each stakeholder in
the port domain. The framework can contribute to a broader understanding of ports as business units, its
development drivers and interaction with community neighbors, and to shed light to port performance
assessment considering both public and private entities.
© 2020 The Authors. Production and hosting by Elsevier B.V. This is an open access article under the
CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
1. Introduction terms of port performance in order to share best practices among

port managers, particularly from developing countries (UNCTAD,
Port performance indicators is not a new topic for port managers 2012). Those indicators were predominantly associated with termi-
nor maritime scholars. In the late 1970s, the UN agency UNCTAD nal operational efficiencies generally based on volume throughput
proposed that signatory countries should adopt and follow cer- (movements per crane, per hour; berth utilization rates; labor ratio
tain port performance indicators (UNCTAD, 1976; UNCTAD, 1987). per TEU are some of the main indicators). Some of those termi-
The idea behind it was straightforward: to be able to measure in nals, given the nature of the capital structure also allowed for
order to improve port performance. This fell immediately within some financial performance analysis generally based on annual
UNCTAD’s mission of promoting trade facilitation that enhances statement and reports. Although insightful for terminal managers,
economic development. Ports are a key element for merchandize those indicators focused a specific aspect (Economic) of port per-
trade transaction to take place. In this sense, UNCTAD has dedicated formance, not including other dimensions equally important in the
a specialized team of experts to follow up on the port performance port activity, such as the social, environmental and political.
indicators. More recently, UNCTAD has proposed a port perfor- Brooks and Cullinane (2007) have argued that port performance
mance scorecard as part of their port training program to combine has a strong correlation with the concepts of governance and
a set of indicators to refine assessment and benchmarking capa- devolution programs. Further, Brooks and Cullinane (2007) have
bility for senior port managers. The main idea of this program made an effort toward a clear cut of port performance measure-
is to bring the industry and academic perspectives together in ments and definitions for port managers and scholars under the
business perspective. More recently Brooks, Cullinane, and Pallis
(2017) have revisited the port governance issues with focus on
the port reform processes and less on port efficiency measure-
∗ Corresponding author. ments. Furthermore, various studies and investigations have aimed
Peer review under responsibility of the Korean Association of Shipping and
to measure and to access port performance. In maritime business,
Logistics, Inc.
https://doi.org/10.1016/j.ajsl.2020.03.001
2092-5212 © 2020 The Authors. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/
by-nc-nd/4.0/).
Please cite this article in press as: Duru, O., et al. Developing a comprehensive approach to port performance assessment. The Asian
Journal of Shipping and Logistics (2020), https://doi.org/10.1016/j.ajsl.2020.03.001
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2 O. Duru et al. / The Asian Journal of Shipping and Logistics xxx (2020) xxx–xxx
Fig. 1. Port efficiency, effectiveness and productivity.

Source: (Esmer et al, 2019)
the typical performance measures approach takes in considera- the governance. That is, beyond the microeconomic aspects, the
tion the economics only. The economic operational level typically development of a comprehensive approach to port performance
uses static indicators to measure performance such as: Utilization assessment should be able to include other strategic dimensions
(= Actual Input/Design Input Capacity, Max. Input); Port Produc- such as social, political and business ethics. This framework can be
tivity (= Actual Output/Effective Input Capacity); Port Efficiency (= applied in different levels of analysis, which are from the strategy,
Actual Input/Effective Input Capacity). Port Effectiveness (= Actual to operational and technical levels. In the port reality, these levels
Output/Effective Input Capacity); Port Effectiveness (management) would correspond to city/region, port and terminals.
(= ‘Qualified’ Actual Output/Effective Input Capacity) (Fig. 1). One of In this sense, this paper objective is to identify conceptual
the main issues that rise from these definitions is related to the data gaps in the literature and with a theoretical approach, assessing
availability. That is, in the absence of actual input, researchers end it with different perspectives about the concept of port perfor-
up using capacity figures (Esmer et al, 2019aaaaaaaaaaa). Another mance. In order to propose a more comprehensive framework
consequence of the lacking data is that a great share of the research this paper consider four main forces corresponding to strategic
is done based on containers volumes throughput, however still dimensions (social, economic, political and business ethics, which
two-thirds of world merchandize trade is of bulk cargo (UNCTAD, included the environmental dimension). The study methodology is
2016). based on three steps. First, we conducted an in-depth literature
Thus, if port performance measures are concentrated in effi- review studies about port performance, analyzing and investi-
ciency measurements and are predominantly using the economic gating their main approaches and methods. Second, we deploy a
approach with using static data, how could the port performance comprehensive assessment instrument is developed by using the
be measured using a more comprehensive approach with multiple quality function deployment (QFD) methodology. The QFD method
lenses (not only economic)? How does port performance follow the is a diagnostic toolbox generally used in manufacturing industries;
port strategy? Are there inconsistencies between efficiencies and however, it is also applied to services sectors identifying possi-
effectiveness? These are some of the orientation questions for this ble threats and opportunities (or gaps) about design, production
study. and operation processes regarding overall expectations of cus-
In this study, we argue that port performance assessment should tomers. QFD, in a port context, can also be defined as a system
be done under multiple lenses for three main reasons. First, based for translating customer (public and private agents/users) require-
on the evidences we have observed in an in-depth literature ments/expectations into appropriate port (entity) deliverables at
review the economic perspective. Second, the predominant busi- each stage from research and service development to engineer-
ness orientation in the port performance assessment. And third, ing and operation and finally to marketing/sales strategies. Third,
considering more recent issues in port developments, such as the a pilot study is used to illustrate the application of the QFD princi-
need for port expansion due to increasing volume throughput; ples as a more comprehensive method to access port performance
the complexification of logistics’ networks; and the changes in beyond the static data.
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O. Duru et al. / The Asian Journal of Shipping and Logistics xxx (2020) xxx–xxx 3
2. The port performance overview in the research agenda Liu’s (1995) study compares public and private enterprises in the
UK port using the Stochastic Frontier analysis (SFA) model referenc-
The literature review conducted focused on two main aspects. ing the port efficiency measured by a frontier production function.
First, we situate port performance as a topic on Maritime The results did not show clear-cut ownership (private or public) as
Transportation literature. Second, we identify the typical port per- relevant factor in the efficiency outcome for the period of analysis.
formance measurements in seminal contributions of researchers in In the case of Tongzon and Heng (2005), they have also studied
the field. the relationship of ownership and efficiency adding to the stochas-
Pallis, Vitsounis, and De Langen (2010), Pallis, Vitsounis, De tic frontier model a principal component analysis (PCA) so that the
Langen, and Notteboom (2011) have considered the research on key factors on port competitiveness could be examined. The results
economics, policy and management of ports published from year indicated that private sector participation can improve the opera-
1997 to 2008. In their classification study they found that “port tional efficiency. The limitations of the paper include the fact that
competition and competitiveness” were prevalent in the period only container terminals were studied.
2002–2006, while the themes of “port governance”, “port plan- Talley (2006) showed that port performance should be mea-
ning and development” and “port policy and regulation” were most sured also by the economic perspective (cost function) rather than
studied in 1997–2001. In the 2007–2008 period it was also noted the engineering (volume throughput) as volume is limited by the
that there was a rise of “ports in the transport and supply chain.” technical efficiency. The author points out that DEA is a consol-
The results shown three main conclusions: First, almost half of idated technique to measure the relative technical efficiency of
the studies are focused on the containers and/or container ter- ports, applied in different cases around the world. Talley (2006)
minals, while other goods (bulk, vehicles, and passenger) are not also called attention to the importance of measuring port perfor-
represented or are five percent of published papers. Second, the mance over time (single port) and in relative terms (multi ports
ports studies within the logistics chain has grown considerably; analysis). The efforts of Cullinane and Wang (2006a) were dedi-
and thirdly, the academic community is characterized by being in cated to demonstrating the relevance of DEA in the port industry.
a pre-paradigmatic stage, which consist of a set of small groups of Their scope of analysis was also the container terminals, but the
researchers with limited references to each other’s research. The most interesting result of their investigation was that “the optimum
research of Pallis et al. (2010) also indicated that in the period from efficiency levels indicated by DEA results might not be achievable in
1997 to 2008 almost half of the papers on ports were published reality, because each individual port has its own specific and unique
in a limited venue through to the International Association of Mar- context (2006, p. 517).”
itime Economists (e.g. Maritime Policy and Management and Maritime Bichou (2006) recognized that despite all the advances made
Economics and Logistics). in port performance metrics, there was still a big gap in measur-
The research of Woo, Pettit, Beresford, and Kwak (2012) aimed ing the ports performance’s integration in the supply chains they
at presenting a structured literature review on ports studies for are inserted. The paper presented a tested model and other cases
the period from 1980 to 2009. The research used content analysis are offered as illustration. The investigation by Brooks (2006) is
techniques to classify the eight hundred and forty papers identified a genuine in presenting the links between port performance and
in eight major themes. The authors concluded by stating that the the devolution process in the literature with strategic management
future of the ports research agenda should be guided not only by insights.
the demands of the industry, but by development of methodologies The study from De Langen et al. (2007) is authentic in the sense
and theories, in view of the complexity of port management. that they also criticize the traditional performance indicator using
Woo, Bang, Martin, and Li (2013) as well as Notteboom, Pallis, volume throughput, and they give a concrete contribution pointing
De Langen, and Papachristou (2013) had similar research objec- out alternative PPI (port performance indicator) that can be used.
tive which was to analyze the content of papers published over They also indicate ports that are already collecting data for these
the forty years of the journal, Maritime Policy and Management, alternative PPI, as well as they name the interest of stakeholders
(1973–2012). Woo et al. (2013) stems from the assumption that the and benefits for the port authorities in analyzing these alternative
issues related to shipping were initially dominant while the issues indicators. Relevant for this study is the new PPI they suggest for
of ports were of increasing interest to researchers later. The authors socio-environmental stakeholders.
divided the time frame in four periods (1973–1979; 1980–1989; The investigation by Gonzalez and Trujillo (2009) is perhaps
1990–1999 and 2000–2012). The results highlight the followings. one of the most comprehensive review on port efficiency measure-
First, Economics remains as predominant field with about thirty- ments. The paper’s scope is limited to economic productivity and
five percent of all the published papers, but Management field has efficiency of ports and as such, the authors give a great contribution
greatly increased, particularly in the 2000s. Second, “conceptual to show the dominance of the Economics (as field) and Statistics
work” has the largest share in methodologies applied (35.1% or 345 (as methodology and model) of port performance analysis in the
of the 984 papers). However, authors noted that the methodologies 1995–2006 period. The authors give also a relevant insight for pol-
applied were becoming more sophisticated with advancing com- icy makers, pointing the need of closer follow up of corresponding
puter techniques that allowed usage statistics and mathematical authorities of port data collection.
models, with number of publications growing in the 2000s. Port efficiency is also studied at the operational level. For exam-
In second part of our literature review, we have identified the ple, multiple papers have focused on the use of operations research
researchers that have presented seminal contributions in the study models for handling (containerized) cargo (Gharehgozli, Roy, &
of port efficiency measurements. Efficiency remains a priority for De Koster, 2016; Gorman et al., 2014). In general, the business
port managers even though a port’s performance is multifaceted literature covers the strategy levels, while the port literature is
and is no longer limited to internal processes (Woo, Pettit, and dominated by the economic operational level. In this sense, the
Beresford, 2011). Roll and Hayuth (1993) are pioneer in establishing research from Notteboom et al. (2013) gives another relevant con-
research efforts to identify and execute port efficiency performance tribution, as in their aim to understand the extend and scope of port
benchmarking. In Roll and Hayuth (1993) research, DEA is pre- research agenda, their conclusions go toward overcoming three
sented as new methodology for measuring port performance, as challenges pointed out by the authors. First, avoid fragmentation
it provides a relative efficiency rating in the analyzed units and no of the studies that generate lack of consistency and breakdown
‘standard references’ or indexes are required. The paper however, of long-term research agenda; Second, overcome the tendency
works with hypothetical data and not real port cases. to neglect the construction of theories that is to deal with the
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Fig. 2. Stakeholders: Mix and cross-over of economic, social, political, legal environmental/ecological, and technical pressures for seaport resilience.
Source: Gharehgozli, Mileski, Adams, and Von Zharen (2017c).
pressure for publication that direct the research for applied or indicators and assessment; port performance is predominantly
cases studies. Third has to do with the relationship of researchers measured within the economic parameters; and there is a chronic
and policy-makers bearing in mind the relevance and rigor of port lack of data availability on the port level, as the information is
related research: “Scholars tend to focus on making progress in specific typically provided by the individual terminals.
research disciplines whereas decision and policy-makers are interested From the literature it is well documented that the port reform
in the overall operation of ports, i.e. in economic, land-use planning wave of the 1990s has led scholars to seek for performance indica-
and environmental aspects.” (2013, p. 651) tors focused on efficiency. However, how is it possible to measure
The brief literature review performed here shows that there is port efficiency if the full data set is not available and if multiple
gap in the literature in a sense that there exists no paper with a stakeholders are involved in the process? What if the multiple KPIs
comprehensive approach to discuss whether efficient ports are also (key performance indicators) have incompatible (or even contro-
effective. Until recently, the only research done on port focused was versial) reference indexes? What if the efficiency optimization is
from a decade ago on port choice (Hao, 2007). This is surprising, not leading to port effectiveness?
since research on effectiveness has a long history beginning with These are just some of the common questions that arise from a
research on transport carrier choice using service attributes in the more critical perspective of port performance analysis. Port effec-
1970s and early 1980s (see, for example, Saleh and LaLonde (1972); tiveness is out of the scope of this paper, but is a good example
McGinnis (1978); Brooks (1985); LaLonde and Cooper (1989)). Fur- of a relevant topic that has received much less attention than
thermore, the handful discussions on port effectiveness do not port efficiency, as evidenced in the recent research from Brooks,
specify whether the criteria considered are at the strategic, tactical Schellinck, and Pallis (2011a, 2011b); Brooks and Schellinck (2013);
or operational level. In fact, a quick review of the efficiency liter- and Schellinck and Brooks (2014), Schellinck and Brooks (2016).
ature shows that they have been focused on the operational level.
Finally, the papers which focus on the differences of port effec- 3. The port performance in four dimensions: The
tiveness and efficiency tend to focus on a specific stakeholder and theoretical background
dismiss the other ones.
The research efforts leave us with three key points for our The stakeholders’ literature is not new in corporate governance
investigation: there is an increasing interest for port performance (Freeman & Reed, 1983), the incorporation of the stakeholders in
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Fig. 3. An overview of the port performance assessment process.

Source: Authors’ own elaboration.
the port governance studies is relatively new if comparted to port that social and environmental aspects have to be part of the port
performance indicators as reviewed in the previous section. performance assessment considering the nature of port activities
The port stakeholders’ studies have in general the focus on the and the ethics that its business should follow in an international
stakeholders’ management, considering their different interplay competitive environment. In addition, the port reform ‘wave’ from
forces (Notteboom & Winkelmans, 2003) or their conflicting inter- the 1990s with subsequent changes in the governance (Brooks &
ests (De Langen, Nidjam, & Van der Horst, 2007; Galvao, Wang, & Cullinane, 2007) leave no doubts that regulation and legislation
Mileski, 2016; Parola & Maugeri, 2013). In the cases of Lam, Ng, and have to be considered in any performance assessment of ports.
Fu (2013); Cruz, Ferreira, and Azevedo (2013) and Dooms (2014) In other words, this means while the economic dimension
the authors have built on the stakeholder analysis to provide a includes any financial and operational efficiency measurements,
framework of analysis that links stakeholders to governance issues. the social, ethic and political dimensions have to take into account
Within a port, two different sets of people act as stakehold- the port as a dynamic activity that brings impact to the location
ers: those who directly use, regulate, maintain, and police the port, (environmental and community) at the same time it is impacted
and those who indirectly benefit or are otherwise affected by the by national and international circumstances (trade, regulation and
activities of the port. development). At a glance, we have that: The Social dimension is
Fig. 2 provides an example of some of the stakeholders in the related to labor, impact on community, people and culture; the
analysis that may influence or exert pressure on. Port performance Political dimension has to do with regulation, law, policies and gov-
must be analyzed by keeping in mind both the stakeholders inside ernance; the Ethics dimension can consider many different aspects
and outside the port perimeter. of the social and environmental responsibilities; and Economics is
In any of those cases studied in our review of port stakeholders’ related to the profit and resources required in the port business.
literature we could notice that researchers have not necessarily These four dimensions (economic, social, political and ethics) can
found new stakeholders in the port context, but their interrelation be applied in different levels of analysis, that is from the strategy,
became more complex as the port business developed to inte- to operational and technical levels. In the port reality, these levels
grate supply chains and robust logistics operations. In this sense, correspond to city/region, port and terminals.
our study has considered that besides the economic dimension, As such, our hypothesis is that a port is performing well when
which shall remain as the main driver, there are at least three other these four dimensions are fulfilled. The next questions are then,
dimensions that should be incorporated for a more comprehen- what are the indicators to examine in each dimension? What are
sive port performance assessment. The novelty we present here is the parameters to consider and how to balance them? In order to
the link between port stakeholders’ expectations and the port per- be able to answer these questions, we have to bear in mind the
formance measures and concepts. The ‘comprehensive’ framework different groups of stakeholders and their specific interest in the
refers to encapsulating of various aspects as well as a compro- port performance.
mised assessment. Building a ‘stakeholder neutral’ perspective is
obviously impossible. None of assessments would satisfy all stake- 4. Measurement and quantification in port performance
holders for all of their desires.
A performance assessment is conventionally expected to rep- The assessment process consists of four main steps as parts of
resent a certain point of view. From the perspective of a terminal the QFD approach. In the first step, the stakeholders were iden-
operator, any strategies that reduces costs may be feasible while tified. In the second step, the criteria that satisfy performance
some of these strategies may dissatisfy e.g. society (e.g. environ- perception of each group were defined. Those criteria must be com-
mental concerns originated from cheap but harmful equipment). prehensive and independent. If two criteria are dependent, then
However, a compromised assessment can be developed based on a they have to be combined and labeled again. In the third step,
predefined priority degree of major stakeholders while the debate the technical measures corresponding to the criteria were iden-
raises on the definition of priority. The pilot study in Section 5 tified. Technical measures must be “measurable”, “tangible” and
illustrates two cases including priority-based and priority neutral must have a unit (i.e. KPIs). Furthermore, a technical measure can
assessment, so one may compare both types of allocation. be a binary question such as quality management system exists
Based on the initial discussions of Notteboom and Winkelmans or not. Finally, the level of contribution of each technical mea-
(2003) on stakeholders’ management and, also on the more recent sure to each criterion were estimated. Furthermore, the importance
research of Dooms (2014) about integrating the three “Ps” (profit, level of each criterion were identified (priority of each criteria). As
people and planet) in the performance bottom line, we consider a result, we will see how each technical measure contributes to
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Table 1
Stakeholders & expectations in port and terminal business.
S1 Terminal Operators (incl. Owners and Investors) Notes

E1.1 Profitability/Earnings Higher operating returns, less operating cost
E1.2 Customer Loyalty (Business Sustainability) Customer commitment and long-term contracts
E1.3 Credibility/Financial Reputation Financial strength and higher credit rating
E1.4 Publicity/Brand Value General reputation, brand equity, goodwill
E1.5 Responsive and Professional Public Institutions Port authority, landlord, public administration
E1.6 Safe and secure cargoes and their contents
E1.7 Safe and secure on board operations at berth Operations managed by ships and their officers
E1.8 Proper pilotage/tug services 7/24 service, proper number of tugs
E1.9 Hinterland/Foreland architecture and plasticity Flexibility of backyard for development prospects
S2 Cargo owners
E2.1 Safe and secure handling of cargo
E2.2 Less transit time (quick service)
E2.3 Cheaper service (right pricing)
E2.4 Smooth and quick customs procedure
E2.5 Convenience/Flexibility of storage facilities (early drop-off and late pick-up)
E2.6 Less and reduced carbon footprint
S3 Shipping firms (shipowners)

E3.1 Less transit time (mooring, cargo handling)
E3.2 Safe cargo handling
E3.3 Lower terminal fees
E3.4 Convenient/safe terminal location
S4 Inland carriers (incl. Logistics firms, trucking and rail transport firms)
E4.1 Less transit time (handling, gate operations)
E4.2 Convenience/flexibility of parking facilities
E4.3 Smooth and quick customs procedure
E4.4 Convenience of transport infrastructure
S5 Local and national government (incl. landlords/port authorities)

E5.1 Terminal security
E5.2 Safe terminal operations
E5.3 Social responsibility
E5.4 Compliance with labor standards
E5.5 Responsiveness to government inquiries (e.g. data sharing)
E5.6 Transparency and proper communication
E5.7 Competitiveness and growth (developmental attitude)
S6 Global and supra-national regulators

S7 Society/citizens
E7.3 Social responsibility
E7.5 Transparency and proper communication
E7.7 Positive and adaptive port-city connection
S8 Workers/labor (internal customer)

E8.1 Compliance with labor standards (working environment)
E8.2 Higher salary scale and benefits
E8.3 Social security
E8.4 Relevant facilities and training opportunities
satisfaction/dissatisfaction of a particular stakeholder or its expec- In this paper, a more functional classification as presented
tation. Fig. 3 gives an overview of the framework (QFD method and on Table 1 was preferred considering latter part of the study
its application will be discussed below with the pilot study). in which we investigated interactions and cause-effect linkages
In the first phase of this study (i.e. Step 1 and 2), an extensive between measures/indicators and stakeholders’ interest. In con-
content analysis process was followed mainly with in-depth sys- trast to previous studies, this paper goes a step forward and
tematic literature review (as built in sections 2 and 3) and authors’ classifies major expectations of each stakeholder to clarify the sub-
assessment of contents (keyword based) of port performance stud- set of requirements. Expectations of each stakeholder (coded as
ies (PPRN, 2019),1 and finally a list of major stakeholders and their Ex.x) also rephrase the definition and attributed meaning which
expectations from port services were gathered in Table 1. eliminates the semantic miscommunication. For example, instead
1
PPRN (Port Performance Research Network) is a group founded within the IAME in focus. It was created in 2001 by academic researchers and its meetings and author
(International Association of Maritime Economists) to investigate port performance publication include maritime industry members and practioners.
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Fig. 4. Traditional format of the House of Quality (HoQ).

Source: Akao (2004).
of using “safety” or “location” a general expectation of all stake- feature of the term.2 Although the third dimension is more about
holders, we have phrased them to meet each stakeholder point of the hinterland, it emphasizes the adoption and tolerance by local
view associated with that variable. community and public policy.
4.2. Defining customer and seller (service provider)

4.1. The Hinterland and Foreland Plasticity
Regarding a comprehensive port performance framework, there
In this paper, we propose a new concept in port studies, the Hin- is no ‘port-centric’ definition of service provider which external-
terland and Foreland Plasticity (See E1.9). Hinterland conventionally izes all other stakeholders and labels as ‘customer’ (stakeholder
refers to all transport facilities and industrial end users (i.e. stake- neutrality principle). The society and citizens of a region or coun-
holders) behind ports while foreland refers to maritime transport try definitely value and benefit themselves from port services due
networks and connections in the sea side of ports. The first con- facilitated trading activities and contributions to the region. There-
ventional use of the term, foreland, goes back to 1950s (Weigend, fore, the relationship between stakeholders is not unidirectional
1956, 1958). Weigend (1958) investigated the term from a seman- from all stakeholders to ports and terminals, but it is actually mul-
tic and bibliometric perspective and distinguished hinterland and tifaceted and it can be seen as a web of interactions. For example,
foreland through their fundamental differences. The modern inter- citizens would require landlord and national government to facili-
pretation of the foreland concept was investigated in Notteboom tate hinterland operations as well as making proper plans to ensure
and Rodrigue (2005) as well as Rodrigue and Notteboom (2010) safe, secure and lean transport. From citizens’ perspective, local and
based on the port regionalization problem. According to Rodrigue national government is also a service provider or facilitator. Consid-
and Notteboom (2010), port regionalization is not only a process in ering the entire concept of ports and terminals, port performance
hinterland, but it is also the evolution of foreland through cooper- inquiries are a more complex web of relationships.
ation among regional ports.
The concept of the hinterland and foreland plasticity refers to 4.3. Quality function deployment and expectations matrix
three fundamental features. First, ports extend their operations and
business backward to intermediate hubs and hinterland in general. The quality function deployment (QFD) (Akao, 2004) method
Many ports have been built in developing stages of their regions is an instrument to find a final cumulative impact of a technical
and countries, and cities behind those ports have enlarged and measure (e.g. KPIs) on particular aspects of customer satisfaction
spread out through the connection between ports and hinterlands. (i.e. expectations). The motivation behind the methodology arises
Eventually, ports have significant difficulty to find suitable land and from the fact that there is no direct link between a final product or
facilities to expend their operations and business. In this circum- service and various segments of the organization. In other words,
stance, plasticity refers to the capacity and flexibility of hinterland expectations of customer cannot be reflected in different agents
for expansion without tackling with the city at the background. Sec- and departments of the product/service provider. For example, it is
ond, the plasticity of hinterland may refer to intermodal capacity quite difficult to translate requirements of shipping firms into envi-
and flexibility. Development and expansion of ports typically need ronmental or financial apparatus (i.e. technical measures) while
the development of transport infrastructure between hinterland same translations need to be performed many other stakeholders
and ports as well as other destinations in the network (i.e. fore- too. In this regard, the QFD methodology helps to translate require-
land). In some cases, port development is restricted by inability to ments into measurable and tangible instruments as well as to
develop transport infrastructure, and that is classified as another
dimension of the plasticity. In addition to above mentioned costs
of inaccurate city and port planning, the plasticity of hinterland 2
The term, the hinterland and foreland plasticity, may be extended with other
in terms of political and social aspects is the third fundamental aspects of port/terminal operations and management.
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Table 2
Impact of performance indicators on stakeholder satisfaction (Sample: Portugal, S.Pore, U.S.A., Turkey).
calculate the equilibrium among stakeholders as well as prioritiz- and essential than the number of people in this exercise. A few
ing instruments in terms of their cumulative impact on costumer’s subject matter experts would be sufficient than hundreds of less
satisfaction. When only one type of customer is present, such trans- qualified people with limited experience. Therefore, the QFD should
lation should show an equilibrium among technical measures and not be confused with conventional surveys and their sample size
highlighted measures of the greatest impact. A production unit may requirements. The legitimate population of the QFD is already very
have so many technical measures to manage and to improve the small due to the limited number of subject matter experts with
product while ensuring certain internal criteria (e.g. breakeven, broader understanding, experience and technical credentials.
profitability, manpower security). The QFD approach helps orga- It is a very natural argument that customer requirements are
nizations to identify technical measures with the greatest impact not equally important. Therefore, customer requirements need to
for better utilization of resources. be prioritized too. The prioritization of customer requirements can
The house of quality (HoQ) is an essential component of the directly be asked to a sample of customers. However, this paper has
QFD, and it is a matrix of customer (i.e. stakeholder) expecta- slightly different objectives and structure. In this paper, the rela-
tions vs. technical measures (e.g. KPIs) (Fig. 4). The function of tionship between groups of respondents (e.g. cargo owners and
HoQ is to clarify and quantify the contribution of each technical shipping firms) and groups of technical measures are compared.
measure to the improvement of the stakeholders expectation as This paper does not attempt to investigate the relationship between
well as the cumulative improvement of the objective phenomenon requirement of a specific customer and a technical measure at
(Akao, 2004). An expert panel (e.g. experts, engineers, consultants, the micro level. Instead, this paper investigates macro relation-
researchers) estimates the level of relationship between technical ships between stakeholders and groups of technical measures to
measures and their corresponding technical/management appara- shed light to future research. In other words, future research may
tus and customer requirements based on a scale of 0/1/3/5/7 or focus on a specific customer group (stakeholder) and its expecta-
0/1/3/5/7/9 (higher the rating, stronger the impact). When the relations (listed in Table 1) and technical measures for a given port or
tionship can be estimated numerically, corresponding rating can terminal. For the purpose of this paper, the significance of each
also be reflected based on a correlation index. However, it is most stakeholder is investigated through independent subject matter
probably mentally calculated by subject matter experts. In contrast experts. If this question would be asked to specific stakeholder,
to traditional surveys, subject matter experience is much valuable each stakeholder would naturally prioritize its own requirements.
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Table 3
Impact of performance indicators on stakeholder satisfaction (Sample: Brazil).
Therefore, participants should be impartial or reflect the impartial ports and terminals (e.g. dry bulk terminal vs. container termi-
standpoint. Priorities can be extracted in various ways and then nal).
normalized. In this paper, we asked a few experts with broader Similar to the correlation matrix, intra-industry assessment is
views and without direct connection to any interest group as well not performed in this paper. Intra-industry assessment section is
as collecting opinions among scholars (including authors). A rank- a useful component in which the target organization is compared
rate approach was followed in which stakeholders are put in order to its competitors in terms of each customer requirement. Since
of importance (for the port ecosystem) at the first stage, and then, there is no target organization and micro level analysis, competitor
assuming the top stakeholder as 100 points, remaining stakehold- section is also irrelevant. Future research at the micro level may
ers are given points in 0–100 scale considering the indifference also consider reflecting competition analysis.
value with the top choice. Median responses are normalized to The expectations of stakeholders have already been discussed
define priority degrees. For example, ‘Terminal Operators’ has been and listed in Table 1. The definition of technical measures is another
given 95 points just below the top choice, ‘Cargo Owners’, with 100 fundamental question to develop practical strategies to improve
points. It is normalized priority calculated at 0.16 (=95/605 sum of port performance. Considering authors in-depth analysis of tech-
given marks) while ‘Cargo Owners’ has 0.17 (=100/605 sum of given nical papers, case studies and various publications of UNCTAD (as
marks). refereed on Sections 2 and 3), the technical measures of port ser-
The HoQ may also represent the relationship between technical vices in its wider meaning are classified in nine groups of indicators
measures. The correlation matrix above technical measure row can as follows:
be utilized for this purpose (as in Duru, Huang, Bulut, & Yoshida,
2013). On the other hand, this paper does not attempt a micro • Market Indicators (e.g. % market share)
analysis and correlation assessment. A sample of technical mea- • Financial Indicators (e.g. Return on equity)
sures in each group is provided to participants while this paper • Operational Indicators (in-terminal) (e.g. Ships/Day, Hours/Ship)
does not investigate each technical measure. Micro level assess- • Technology Indicators (equipment-technology) (e.g. Age of gantry
ment may be conducted for the case of a specific port or terminal, cranes)
and technical measures are actually different for various types of • Port/Harbor Indicators (seaway) (e.g. No. of marine accidents)
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• Environmental Indicators (e.g. Volume of CO2 Emission) considered regarding the different contexts of each respondents’
• Social Indicators (public relations, CSR) (e.g. $ spent for local com- countries. In Brazil, for instance, respondents have emphasized
munity) the operational and financial indicators as per rank results shown
• Gate/Hinterland Indicators (border and out-terminal) (e.g. Average in Table 3 (bottom line). This could be explained by the country
gate time per truck) regulatory framework, specifically as the concession processes are
• Macro-Economic and Political Indicators (e.g. Volume of regional implemented by government agencies (centralized and long last-
trade, economic climate) ing). Still in Table 3, we can see that in Brazil, the respondents rank
to indicate that Brazilian government should focus on facilitating
In this paper, the stakeholder expectations are represented by and developing trade and national economy as well as building
each stakeholder group as a cumulative means of requirements financially feasible ports/terminals to satisfy/support these stake-
and expectations to be satisfied. Technical measures are also rep- holders. The terminal operators ranked 2, indicating that terminal
resented by each group of indicators. In this research track, future operations must be improved as well. In such a way, we consider
studies will search for the relationship between each expectation that these results are consistent with some major issues identified
of stakeholder and each technical performance measures. at Brazilian large infrastructure projects such as lack of funds for
new building; and government policies discontinuity both impact-
5. Testing the concept of a comprehensive framework: a ing the operational and economic efficiencies of ports (Galvao et
pilot study al, 2017)(Galvao et al., 2016). In the case of public ports, the port
governance structure centralizes decisions at the Federal Govern-
As a pilot study, Table 2 introduces an estimated matrix of stake- ment level, there is actually a lack of autonomy, i.e., dependence
holders (as representative of unique expectations) vs. technical of public funds transfer for facing investment, debts services and
performance measures (as representative of micro level indica- even operational expenses.
tors behind them). The objective of this pilot study is to represent
potential gross interactions between stakeholders and groups of 6. Conclusions
technical measures of port operations and connected activities. A
group3 of operational executives from port business and logistics Overall, we consider that the paper has accomplished its objec-
company representatives as well as a few researchers are invited (in tive of reviewing in-depth the international literature of port
Brazil, Portugal, Singapore, Turkey and USA, whose profile is sum- performance and based on a critical view on them, we have studied
marized in Annex I) to participate to the pilot study. The pilot study an alternative more comprehensive framework for port perfor-
is a rough estimation for an average response, and Table 2 presents mance assessment covering four dimensions (economic, political,
the median response for each group of data. The slight difference social, ethics). The stakeholder impact matrix shows that it is possi-
between priority-based and priority-neutral analysis reflects the ble to have different expectations from different stakeholders being
approximation. assessed at the same time, which support our original hypothe-
The distribution of the impact of stakeholders could be mon- sis of “a port is performing well when these four dimensions are
itored through the density of symbols in the matrix. The direct full filled”. The pilot study has validated the original idea of sec-
stakeholders of port/terminal operations (terminal itself, cargo tor need of a more comprehensive analysis of port performance
owners, shipping firms) cluster around the operational and techno- indicators. As such, this conclusion should provide insights to port
logical indicators while the rest of the stakeholders lay through the managers and policy makers in how to integrate the QFD in their
right of the matrix which represents hinterland, society and macro- bench makers. The continuation of this research requires system-
economic and political aspects of the port business. Based on pilot atic input collection from a larger sample of stakeholders’ groups
study entries, the priority of each stakeholder is presented with aiming to provide an amplified pool of data that could sustain cross
normalized priority degrees (ranking and standard scoring are uti- country managerial recommendations for the port stakeholders in
lized for the pilot study). Below the matrix, the level contribution addition to improve mutual understanding and interaction.
(sum-product of priority and size of impact; normalized values) In an ongoing research, much sensitive and detailed analysis of
and ranking of technical measures are calculated (the conventional those interactions are investigated through a wider group of rep-
arithmetic operations of the QFD method are utilized). resentatives which will reveal more practical and insightful results
Fundamentally, two groups of technical measures stand out in about the comprehensive port performance framework.
the entire sample of indicators. Macro-economic and political indi-
cators represent the bird’s eye view to the problem and emphasize
the higher-level factors while technology indicators are more about Acknowledgement
the internal capacity (also operational indicators). However, the
pilot study just deals with the gross impact of groups (stakehold- The authors would like to thank editors and the two anonymous
ers and technical measures) which is definitely an overview of the reviewers whose comments helped us to improve the quality of this
entire problem. Furthermore, there are special circumstances to be paper.
3
The participants have agreed to provide their answers on a volunteer based and
have received no monetary compensation for their time.
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volunteered to collaborate in the pilot study Galvao, C. B., Wang, G. W., & Mileski, J. (2016). Public-private interests and conflicts
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AJSL-239; No. of Pages 12 ARTICLE IN PRESS

H O STED BY Contents lists available at ScienceDirect

The Asian Journal of Shipping and Logistics

Developing a comprehensive approach to port performance

1. Introduction terms of port performance in order to share best practices among

Fig. 1. Port efﬁciency, effectiveness and productivity.

Fig. 3. An overview of the port performance assessment process.

S1 Terminal Operators (incl. Owners and Investors) Notes

S3 Shipping ﬁrms (shipowners)

S5 Local and national government (incl. landlords/port authorities)

S6 Global and supra-national regulators

S8 Workers/labor (internal customer)

Source: Authors’ own elaboration.

Fig. 4. Traditional format of the House of Quality (HoQ).

4.2. Deﬁning customer and seller (service provider)

Source: Authors’ own elaboration.

Source: Authors’ own elaboration.

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