A study on port cooperation in the Tianjin and Hebei areas using factor analysis.
Sun, Ying ; He, Weida
When China switched its economic development focus from the
Chanjiang-Zhujiang Delta to the Bohai Sea, Tianjin and Hebei became two
of the fastest developing areas in the country. As the hub of logistics,
the port system plays an important role in increasing the region's
economic development. This paper reviews port logistics in Hebei and
Tianjin, and explains the necessity of port cooperation in these areas.
An index system for port logistics competition is proposed using factor
analysis. The results can be used to guide the positioning and
development of each port based on its individual strength, thereby
improving the port logistics of the entire area.
1. Introduction and Literature Review
Ports have significantly facilitated foreign trade in the Hebei and
Tianjin areas by providing important resources for the development of
energy and chemical industries. The development of port logistics also
greatly stimulated the economic growth of these areas. Presently, there
are five ports along the 640 km coastline of Hebei and Tianjin. They are
Tianjin Port (the largest man-made deepwater port in China), Qinhuandao
Port (the country's largest energy exportation port), Huanghua Port
(a coal exportation port for Shenhua Group), Jingtang Port (a regional
industry port), and Caofeidian Port (the key investment project of the
National Eleventh Five-Year Plan). However, due to the lack of
cooperation among ports, insufficient investment and superfluous
construction has led to a tremendous waste of resources. Cooperation
among the five ports is necessary in order to enhance the prosperity of
these areas.
Due to the strong ties between Beijing and Tianjin, Tianjin port
plays an important role in the dual-nuclei urban group for the
development of Beijing, Tianjin, and Hebei (Meng, 2008). Tianjin's
many advantages (e.g. geographic location, trade status, economic basis,
marketing carrier) may enable it to become a leader in the Jing-Jin-Ji
economy. However, the lack of overall planning, the same industrial
structures, and disjointed industrial linkages are among the factors
hindering cooperation among Beijing, Tianjin, and Hebei. It is therefore
necessary to develop relationships between the ports and the hinterland,
and to define Tianjin's leading status in the Bohai region. From
the perspective of domestic and international macro-economic
development, and in order to promote the Bohai region's rapid
development, the logistics and industry resources of the Jing-Jin-Ji
region should be integrated. This will enhance economic development
competition and strengthen economic cooperation (Jiao, 2008). The 2008
Beijing Olympic Games, as well as national and local governments'
development plans, brought unprecedented opportunities for the Tianjin
Binhai New Area and Hebei Caofeidian zones. This, in turn, enhanced the
feasibility of logistics integration of the Jing-Jin-Ji region (Jiao,
2008).
The importance of these ports is described in the literature.
Caofeidian's natural conditions and regional advantages are
important to the economic development, industrial adjustment, industrial
layout, and shipping transport of the Bohai economic circle. It is
considered a key area for spurring economic development and enhancing
economic integration in the region (Yu, 2006). Wang and Qu (2008)
emphasized that harmonious development of the Jing-Jin-Ji Port Group has
a significant effect on the hinterland's economic development,
which is limited by poor coordination of its ports. The authors
recommended establishment of regional coordination mechanisms in order
to strengthen the complementarity of the port group and advance market
development in the Jing-Jin-Ji region. Qinhuangdao Port was considered a
main hub for coal transport (Zhao, 2005). The port has been an important
supplier to the world's coal market, especially in Southeast Asia.
However, Qinhuangdao has the disadvantages of a lack of storage capacity
and long land-rail distances. Finally, Tianjin port has unique
conditions and a tremendous potential to promote development of the
Tianjin Binhai New Area. This, in turn, would be conducive to enhancing
the international competitiveness of the Jing-Jin-Ji and Circum-Bohai
Sea regions, and to implementing a national strategy for harmonious
regional development (Wang, 2008).
2. Index System for Port Logistics Competition
Port logistics competition refers to the capacity of a port to
provide improved logistics services during present and future
development when compared to its competitors (Feng, 2005). It is
described by the following (Zhao, 2006):
(1) A large harbor capacity and strong assembling/distributing
capacity to ensure a continuous growth of throughput.
(2) A complete infrastructure. For example, the channel's
water depth and port berth should satisfy the needs of ships and have
appropriate redundancy. Port devices should suit the development of
modern integrated logistics.
(3) A logistics service level that ensures high customer
satisfaction.
(4) A superior environment for port development, such as the
natural environment of the port's location, a prosperous hinterland
economy, and advanced coastal industry.
(5) Sustainable development capacity of the port. This is important
for steady increases in throughput and rapid development of logistics
value-added services.
Using these features, an Index System for Port Logistics
Competition was designed in Table 1.
Table 2 shows data for the evaluation index of the Tianjin Port and
ports in Hebei province evaluated according to this index system.
All data were from statistics reported in the 2006 China Annals of
Statistics and Transportation except the data for Shipping Service and
Development Level of Logistics Value-Added Services. In order to warrant
the objectivity of these two indexes, the data resulted from
consulations with 50 shipping dispatchers from the Sino Charter Company.
Total GDP of 2006 and the ratio of import and export to GDP of the port
cities were used to calculate the index of Hinterland Economy. Index of
Oneness of Goods was computed by the ratio of quantity of goods with
maximum throughput to the overall throughput of the port.
3. Factor Analysis and Evaluation Results
3.1. Standardization of Original Data
The original data were first standardized to eliminate the
influence of different dimensions. Standardized data obtained via SPSS
13.0 are shown in Table 3.
3.2. Factor Analysis and Interpretation of Common Factors
Through correlation tests performed in SPSS 13.0, factor analysis
was verified as being appropriate for analyzing the standardized data.
Tabulating major factors (Table 4) shows that the cumulative variance
contribution of the first three common factors reached 95.45%. Since
95.45% of the original information was reflected by the first common
factors, these three factors were used to evaluate the port logistics
competition, referred to as first, second, and third major factor,
respectively.
The factor loading value reflects the correlation between the
common factor and an original variable index. A negative factor loading
value represents negative correlation. The higher the factor loading
value, the closer the correlation between the index and the common
factor, and the more information the common factor reflects (Zhang and
Fang, 2003). Table 5 lists the factor loading matrix after 25
iterations. Data in this matrix were then used to analyze detailed
information reflected by the three common factors.
As shown in Table 5, all 12 indexes can be divided into three
common factors. The first common factor (F1) includes Throughput
Capacity of Berth (X6), Throughput of the Port (X7), Development Level
of Logistics Value-Added Services (X12), Area of Storage Storeroom and
Field (X5), Number of Deepwater Berth above 10000 Tons (X4), Shipping
Service (X9), and Average Growth Rate of the Throughput in the last 5
years (X11). These seven indexes combined were named as Factor of Port
Logistics Comprehensive Strength.
The second common factor (F2) includes Hinterland Economic Strength
(X 1), Extraversion of Hinterland Economy (X2), and Customer
Satisfaction (X 10). These three indexes combined were named as Factor
of Development Environment of Port Logistics.
The third common factor (F3) includes Water Depth of Channel and
Berth (X3) and Oneness of Goods (X8). These two indexes combined were
named as Factor of Natural Condition and Specialization Degree of Port
Logistics.
3.3. Analysis of Results
In order to compare port logistics competition, the regression
method was used to compute factor scores based on the results from
factor analysis. The comprehensive score of each port, as shown in Table
6, was obtained via weighted sum (F=51.62%xF1+28.9%xF2+14.93%xF3). The
weights are the ratio of each factor's variance contribution rate
to the three cumulative variance contribution rates.
The comprehensive score, F in Table 6, was used as the standard for
quantitatively evaluating port logistics competition, which reflects the
characteristics of port logistics competition of the Tianjin and Hebei
area ports. Specifically:
(1) Overall, Tianjin Port leads in logistics comprehensive strength
and development environment while the four ports in Hebei can be seen as
feeder-service ports of the Tianjin Port.
(2) Individually, each port has its own comparative advantages.
Qinhuangdao Port has the highest comprehensive strength in the Hebei
area. Caofeidian Port, as a natural deepwater port, has the highest
degree of specialization for iron ore and natural resources. Huanghua
Port has the comparative advantage in specialization degree for coal
output. Finally, the logistics development environment of Caofeidian
Port and Jingtang Port is better than those of Qinhuangdao Port and
Huanghua Port.
4. Discussion
According to the above analyses, this study proposes the following
positioning and development strategies for ports in the Tianjin and
Hebei areas.
4.1. International Hub Port: Tianjin Port
Tianjin Port is the core hub port of this area and is an
appropriate choice for the International Logistics Center of Northern
China. In order to achieve this goal, Tianjin Port should place its
priority on developing container transportation, expediting the
construction of its deepwater channel and berth for container/bulk cargo
shipment, and establishing a logistics center for container/bulk cargo
shipment. The goods structure should be adjusted appropriately. For
example, domestic trade materials (e.g. energy materials and ore) that
are transferred inland could be distributed to ports in the Hebei area.
Bulk cargo transfer of foreign trade materials from inland could be
distributed, and some moderate general cargo transfer could occur, in
order to concentrate on international container transportation.
In the meantime, relying on the advantages of location,
transportation, and information, Tianjin Port should reinforce its
infrastructure, build a seaport and airport international logistics
center, develop a Logistics Park, specialization logistics center, and
distribution center, and form a modern logistic network by constructing
a logistics information platform in order to promote its function in
modem logistics and trade service.
4.2. Regional Hub Port: Qinhuangdao Port and Caofeidian Port
Qinhuangdao Port and Caofeidian Port should take full advantage of
their high degree of specialization to further the development of a
regional port and transportation hub for energy material and raw
materials. They should hasten construction of port areas and improve the
network for collection, distribution, and transportation. By developing
the logistics of bulk cargo (e.g., coal and iron ore) and near-sea
container transportation, these two ports can become the outport of the
Tianjin International Logistics Center. Qinhuangdao Port's
specialization gives it an advantage over the Tianjin port, while its
selectivity gives it an advantage over the Huanghua Port. It should
strategically reform the use of berths, types of coal, and the
marshalling yards. It should also employ multiple means and adopt
computer technologies for all processes. This will allow it to reach the
highest level of efficiency, and ensure convenient operation.
Caofeidian Port has a sophisticated highway transportation system.
Its deepwater advantage and geographical location make it an ideal place
to develop large-scale heavy chemical industries such as iron and oil.
Recently, an oil field has been found at Nanbao near Caofeidian Port,
and Shougang Group is building new factories in the industrial park of
Caofeidian Port. Consequently, Caofeidian Port is expected to become a
port mainly for the transportation of oil, iron ores, and containers. A
comprehensive transportation network should also be constructed to make
Caofeidian Port complement Tianjin Port.
4.3. General Feeder Port: Jingtang Port and HuangHua Port
Jingtang Port is also located in Tangshan City and, therefore, has
the same geographical location advantage as Caofeidian Port. It is
expected to have an increased investment environment, develop the
capability for container transportation, and have enhanced absorbing
capacities for its resources. Jingtang Port should emphasize the
construction of a modern open logistics service system and logistics
network system to widely influence the eastern Hebei area.
Huanghua Port is strong in coal output. Relying on Shenhua
Group's integrative management advantage of coal production and
distribution, railway transportation, and port transferring, Huanghua
Port could establish a large-scale coal port area with a high degree of
specialization. Huanghua Port is expected to strongly support the
hinterland's economic development and near-port industry.
5. Conclusion
This paper used factor analysis to analyze the strengths of ports
in the Tianjin and Hebei areas, and proposed strategies for port
decision-making. The ports should take advantage of their individual
strengths so that they may complement each other, thereby increasing
overall competence of ports in the area. The proposed strategy is to
form a regional international logistics center in Tianjin Port (as the
region's core), establish Qinhuangdao Port as a backbone, Huanghua
Port and Jingtang Port as bases, and Caofeidian Port as a focus. The
regional international logistics center will centralize and scale
shipping elements, as well as assume a significant position in
international container transportation and energy material
transportation. This configuration will provide economic and social
benefits through enhanced port cooperation and resource allocation, as
well as infrastructure investment and hinterland economic development.
Future research should focus on better quantifying the factors/indexes
that can influence port logistics competition in order to further
improve port decision-making.
References
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Jiao, W. 2008. Analysis of the necessarily and feasibility of
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Wang, J. 2008. The advantage of developing Tianjin Port logistic.
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Wang, S. & Qu, Y. 2008. The relationship analysis between
hinterland and Port of Harmony Development in the Jing-Jin-Ji Port
Group. Economy and Management, 5.
Yu, W. and Zou, X. 2006. Effect of Caofeidian Great Deepwater
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by
Ying Sun and Weida He
University of Science and Technology, Beijing, China
Table 1: Index system for Port logistics competition
Primary Index Secondary Index
Hinterland Economy Hinterland Economic Strength(X1)
Extraversion of Hinterland Economy(X2)
Port Logistics Water Depth of Channel and Berth(X3)
Infrastructure Number of Deepwater Berth above 10000
Tons(X4)
Area of Storage Storeroom and Field(X5)
Throughout Capacity of Berth(X6)
Port Logistics Throughput of the Port(X7)
Condition
Oneness of Goods(X8)
Service Level of Shipping Service(X9)
Port Logistics
Customer Satisfaction(X10)
Potential of Port Average Growth Rate of the
Logistics Throughput in the last 5 ears(X11)
Development
Development Level of Logistics
Value-Added Services(X12)
Table 2: Data for the evaluation index of Tianjin Port and Ports in
Hebei province
Index Tianjin Qinhuangdao Huanghua
Port Port Port
X1 4337.73 571.56 1281.67
X2 645.73 28.93 10.63
X3 10 16.50 13
X4 65 42 9
XS 240 220 199.4
X6 23388 22641 6785
X7 25760 20489 8145
X8 0.231 0.864 0.984
X9 1 0.6 0.3
X10 99 95 95
X11 0.158 0.125 0.509
X12 1 0.78 0.34
Index Jingtang Caofeidian
Port Port
X1 2361.68 2361.68
X2 34.64 34.64
X3 10 25
X4 17 2
XS 120 58
X6 3115 3000
X7 4066 1005
X8 0.354 1
X9 0.2 0.2
X10 95 95
X11 0.298 0.50
X12 0.25 0.18
Table 3: Standardized data for the evaluation index of Tianjin Port
and Ports in Hebei province
Index Tianjin Qinhuangdao Huanghua
Port Port Port
X1 1.51281 -1.13120 -0.63268
X2 1.78772 -0.44072 -0.50683
X3 -0.78413 0.25604 -0.30405
X4 1.45777 0.57544 -0.69052
XS 0.95067 0.68849 0.41844
X6 1.11689 1.04956 -0.48210
X7 1.29304 0.80154 -0.34949
X8 -1.24422 0.48447 0.81218
X9 1.57200 0.40756 -0.46578
X10 1.78885 -0.44721 -0.44721
X11 -0.87794 -1.05901 1.04804
X12 1.36111 0.75000 -0.47222
Index Jingtang Caofeidian
Port Port
X1 0.12554 0.12554
X2 -0.42009 -0.42009
X3 -0.78413 1.61626
X4 -0.38362 -0.95906
XS -0.62242 -1.43518
X6 -0.83662 -0.84773
X7 -0.72984 -1.01526
X8 -0.90831 0.85588
X9 -0.75689 -0.75689
X10 -0.44721 -0.44721
X11 -0.10974 0.99865
X12 -0.72222 0.91667
Table 4: Major Factors
Extraction Sums of Squared LoadingRotation Sums of Squared Loadings
% of Cumulative % of
Total Variance % Total Variance Cumulative
8.422 70.185 70.185 6.194 51.620 51.620
1.975 16.454 86.639 3.468 28.900 80.520
1.057 8.810 95.450 1.792 14.930 95.450
Extraction Method: Principal Component Analysis.
Table 5: Factor Loading Matrix
Component
1 2 3
X6 .985 .158 -.025
X7 .954 .252 -.154
X12 .939 .320 -.125
XS .860 -.014 -.350
X4 .855 .429 -.263
X9 .855 .506 -.094
X11 -.790 -.127 .355
X1 -.011 .987 -.158
X2 .499 .846 -.153
X10 .505 .836 -.157
X3 -.264 -.153 .926
X8 -.177 -.638 .703
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Table 6: Comprehensive score of Tianjin Port and Ports in Hebei
province
Ports F1 F2 F3 F Rank
Tianjin 1.2006 1.4959 -0.28032 1.010217 1
Qinhuangdao 0.90349 -1.08594 0.26946 0.192775 2
Huanghua -0.27990 -0.67235 -0.12852 -0.35798 4
Jintang -0.91965 -0.08845 -1.31281 -0.69629 5
Caofeidian -0.90453 0.35081 1.45218 -0.14872 3