Coordination in Hinterland Transport Chains: a Major Challenge for the Seaport Community

A variety of different firms, such as shipping lines, terminal operating companies, forwarders, hinterland transport providers and inland terminal operators are involved in hinterland transport. Besides such private companies, different public actors, such as the port authority, customs and infrastructure managers are involved as well. Coordination between all these actors is required to create effective hinterland transport chains. Nevertheless, coordination in hinterland chains does not develop spontaneously. This may be explained by free riding problems, a lack of contractual relations, information-asymmetry, and a lack of incentives for cooperation. Benefits of more effective coordination include better planning at terminals, scale economies in hinterland services, more reliable services and better utilization of transport equipment. Firms have created ‘coordination arrangements’ to improve coordination in hinterland chains. Some of these arrangements were highly successful, while others failed. This paper analyzes coordination problems in hinterland chains of seaports and different arrangements to solve these problems. The most relevant coordination problems in hinterland chains of seaports are discussed. Based on insights from institutional economics, four main categories of solutions to solve coordination problems are identified: introduction of incentives, creation of an interfirm alliance, changing the scope or the organization and collective action. An analysis is made of a huge number of coordination arrangements from inland container transport from and to the port of Rotterdam, to better understand how coordination problems can be solved.