Terminals as Clusters and Growth Poles

Terminals favor the agglomeration of related activities in their proximity and often adjacent to them. This terminal-client link mainly involves warehousing and distribution (A). The contribution of transport terminals to regional economic growth can often be substantial. As the regional demand grows, so does the traffic handled by the related terminal. This is turn can spur further investments to expand the capabilities of the terminal and the creation a a new terminal altogether (B).

Economists have identified clusters as a critical element in shaping competition between countries, regions and industries. Clusters are defined as a population of interdependent organizations that operate in the same value chain and are geographically concentrated. This concept has been recently applied to seaports. The seaport cluster is made up of firms engaged in the transfer of goods in the port and their onward distribution. It also includes logistics activities as well as processing firms and administrative bodies. The performance of the seaport cluster is defined as the value added generated by the cluster, and is shaped by the interrelationships between the structure of the cluster and its governance. Cluster structure refers to the agglomeration effects and the degree of internal cohesion and competition. Cluster governance relates to the mix of, and relations between, organizations and institutions that foster coordination and pursue projects that improve the cluster as a whole. When applied to the port of Rotterdam it was suggested that a key role was played by the intermediary firms, those that operated services and activities for core transport firms. High levels of trust between firms led to lower transaction costs, and leader firms were very significant because they helped strengthen the agglomeration.

Presented as a new approach, cluster theory is extending what others, including geographers, have recognized for some time, that port activity, historically at least, generates strong agglomeration economies that produce strong spatially distinct port communities. Despite similarities in results from economic impact studies, airports and rail terminals have not yet received the attention of cluster theorists.