Ports as elements in value-driven chain system

1. Members:
• Juan Carlos Calderón
• Raúl Escalante
• Lilibeth Nuñez
• Deyanira Nuñez
• Jubert Sanchez
• Fernando Quezada
Ports as elements in value-driven chain systems
Lecturer: Max Galarza
GRADE:9,5

2. WHY DOES THE FREIGHT MOVE?
Freight moves between firms at supply and demand locations, and the
movement results from a commercial or market transaction in which
supply satisfies demand via the price mechanism.
Firms will not enter the market transaction unless they derive competitive
advantage from so doing. Competitive advantage does not necessarily
mean the maximization of proits; advantage will be gained in the long run
at break-even or better than break-even, acceptable profits.

3. Firm A will derive value from the transaction or utility, or satisfaction often
measured in terms of consumer surplus. Not surprisingly, Firm B will not enter
the market either unless it derives utility or competitive advantage from so
doing.

5. FREIGHT MOVEMENT PATHWAYS

6. • Figure 1 is a simple representation of freight pathways between an export
firm (Firm A in Market 1) and another firm (Firm B), an importing firm in an
international market (M2).
• The exporter has a choice of routes, modes and carriers to any one of three
ports (P1, P2, P3); each port has a number of shipping operations linking the
only importing port (P4); and the port is linked to the importing firm by one
route, although there may be a number of operators on that route.

7. COMPETITIVE ADVANTAGE
• An advantage that a firm has over its competitors, allowing it to generate
greater sales or margins and/or retain more customers than its competition.
There can be many types of competitive advantages including the firm's cost
structure, product offerings, distribution network and customer support.

8. • Competitive advantages give a company an edge over its rivals and an ability
to generate greater value for the firm and its shareholders. The more
sustainable the competitive advantage, the more difficult it is for competitors
to neutralize the advantage.

9. Freight movement pathways
Freight movement pathways depends on the interactions between equipment,
infrastructure, and facilities. The vehicles and equipment that move freight range from
aircraft and ocean-going vessels for international transport, to train and trucks for
interstate transport, and smaller trucks/vans for in-state operations.
International Freight pathways capture the movement of goods between countries, and
may be carried out by truck, rail, or ship. Examples of these pathways include transporting
containers from a port terminal to a distribution center via rail or trucks.

10. Shipping firms are in the business of moving freight. They contract with the buyer or
seller (either directly or indirectly); they intervene, in effect, between the buyer and
the seller as a third party and the price of their intervention is met, or redistributed,
from the price paid by the customer. Freight moves only because in so doing it offers
value and competitive advantage - to the shipper, to the buyer and to the service
provider.
Firm A in Market 1 (export firm) sells to Firm B in Market 2 (importing firm); and
product (freight) moves along logistics pathways, in this case including landside
modes and through ports in shipping networks (ports like Guayaquil, Esmeraldas, La
Libertad, etc)
Freight and logistics are an indispensable component of economic activity. New
industries are dependent upon efficient and low cost transport, and improved
logistics can transform the economy.

12. SOURCES
• Robinson, Ross. (2002). Ports as elements in value-driven chain systems: the new paradigm.
Maritime Policy & Management. //dx.doi.org/10.1080/03088830210132623
• Porter, Michael. (1990). The competitive advantage of nations. New York: Free Press.
• Hayden, Raymond. (November, 2015). Defining Competitive Advantage For Shipping Lines
An Alternate View. Water Transportation. http://www.rhayden.us/water-
transportation/defining-competitive-advantage-for-shipping-lines-an-alternate-view.html