Appraisal of the Performance of Terminal Operators in the Development of Their Host Communities
CHAPTER ONE
Objectives of the study
The main objective of this study is the appraisal of the performance of terminal operators in the development of their host communities. Specific objectives of the study include to:
- To assess the adequacy and accessibility of health services provided by terminal operators to improve the well-being of the host community members.
- To evaluate the establishment and maintenance of educational facilities by terminal operators that cater to the educational needs of the host community members, with the aim of improving their literacy and educational attainment.
- To examine the engagement of terminal operators in economic empowerment initiatives such as skills acquisition programs, job creation schemes, and entrepreneurship development to reduce poverty and improve the standard of living of the host community members.
- To analyze the encouragement of sports engagement by terminal operators through the provision of sports facilities and support for sports development programs, with the aim of promoting physical fitness, social interaction, and talent development.
- To investigate the provision of transportation facilities by terminal operators that are safe, reliable, and accessible to facilitate the movement of people and goods within and outside the host community.
- To assess the provision of security by terminal operators to protect lives and properties of the host community members, and foster peaceful coexistence within the community.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Review
The Concept of Port/Terminal
A port can be broadly defined as an organisation that offers services and infrastructure for ship turnaround (Trujillo & Nombela, 2017). In a nutshell, it offers an infrastructure for loading and unloading cargo from ships. Even if this pedestrian’s perspective on ports may not be current, it represents the crucial role that ports play and hasn’t been undervalued. The effective loading and unloading of goods is the main focus of interest in ports and the services they offer. However, the description provided by the United Nations Conference on trade and development (UNCTAD) captures the function of modern ports today.
Seaports serve as hubs for multimodal transportation since they are the intersections of several types of transportation. They are also multipurpose markets and industrial hubs where items are sorted, produced, and dispersed in addition to being in transit. In actuality, seaports are multi-dimensional systems that must be connected to logistical networks to effectively perform their responsibilities. In addition to infrastructure, superstructure, and equipment, an efficient seaport needs good linkages to other means of transportation, an engaged management team, and staff that are adequately qualified (Trujillo & Nombela, 2017).
The subsequent definitions demonstrate how modern ports now serve a variety of complicated and diversified purposes, serving as hubs for the concentration of economic activity. Yet, “loading and unloading” goods remain the seaports’ principal function; the other activities are seen as value-adding because they are not the main activity. Since the majority of domestic and global trade is transported by sea, the economic significance of seaports depends on their capacity to support global trade flows. As the interface between maritime and land transportation (railways, roads, or inland navigation), ports are essential to the functioning of seaborne trade. It suggests that ports must effectively carry out the fundamental function of “lifting ” and “dropping down” cargo for maritime transport to be efficient. Modern ports provide the following services despite their complexity and diversity: infrastructure, marketing, management, security, vessel services, and cargo services(Trujillo & Nombela, 2017).
A seaport operation is described as a cargo handling (or moving) task carried out by a planned business (gang or team), made up of people and equipment. It can also mean running a dock and other port facilities, running a port passenger transport service, running cargo loading and unloading, running haulage and storage services inside a port region, and so forth (Omoke & Gidado, 2016). Due to the lack of a common definition of what constitutes an efficient port or what port efficiency comprises, defining port efficiency is currently problematic (Photos & Dong-Wook, 2018).
An effective seaport ought to run smoothly. According to this definition, the amount of time a ship spends at a port, the standard of cargo handling, and the level of service provided to inland transport vehicles while they are passing through the port all affect how efficiently sea-port activities are conducted (PwC & Panteia, 2021). The throughput of berths is a measure of the quality of cargo handling, and the infrastructure of the port affects how well inland vehicles are served. Productivity has been recognised as a metric for assessing the effectiveness of seaport operations (Chioma, 2021). Many researchers have examined seaport effectiveness using a variety of methods. As indicators of seaport operational efficiency, annual firm-level surveys have been used, but “there was essentially no information on how to port efficiencies improve over time from these studies” ( Okeudo, 2021). Data envelopment analysis (DEA) has been utilised extensively in several research to estimate the most efficient production frontier across a group of seaports using data on inputs, outputs, and production function theory (Hualong & Banomyong, 2021). The advantages of economies of scale gained from econometric evidence are present in the techniques utilising this method, but a disadvantage is that they frequently assume a continuous return to scale.
Another strategy, econometric estimation of cost functions, was created to solve the problem of error estimation and statistical confidence (Hualong & Banomyong, 2021). Nevertheless, “difficulties with data needs, particularly assessment of labour, capital and other requirements” limit the method’s ability to be applied to numerous seaports at once. There has been some study on how port ownership affects productivity (Hualong & Banomyong, 2021). Even without a change in the amount of competition, switching from public to private ownership is thought to increase seaport operational efficiency. According to some scholars, the private sector may be to blame for the principal-agent dilemma as a result of flaws in the capital market (PwC & Panteia, 2021).
According to Clark & Dollar (2019), a port is an enterprise that depends on providing high-quality service to its clients to be profitable (Akinwale & Aremo, 2020). This is because efficient services are necessary for both ship owners and shippers to continue using a port. The availability of a good, efficient port is one of the elements that determine a ship’s capacity to operate economically. also views a port as a service facility that must be appropriately outfitted to serve its lord effectively if its use and quality of performance are to be acknowledged (Akinwale & Aremo, 2020).
Leighland & Palsson (2018) noted that, more recently, the literature on port efficiency has focused on total factor productivity, using techniques like Data Envelopment Analysis (DEA) or Stochastic Frontier Analysis (SFA), just as the shipping industry’s usefulness, efficiency, and overall performance are evaluated in the light of the services rendered by the sector to the nation (Nwaogbe, Ogwude & Barros, 2021). The goal is to determine the highest output that can be produced using a specific set of inputs or, alternately, the least amount of resources required to produce a specific result. Then, by comparing an individual port’s output (typically annual cargo throughput) and resource inputs with those of the closest point on the “production frontier,” which is based on the input/output ratios of the best-performing ports in the sample, one may determine the port’s overall efficiency. The handling of many output types by DEA and SFA models is challenging, but not impossible. Hence, rather than multi-cargo ports, they are typically applied to single-cargo terminals. Typically, the ports being utilised for efficiency comparisons are at various phases of their life cycles. Because they are maximising the output from the available facilities, ports that are close to capacity are typically seen as “efficient,” even when they are crowded and provide subpar service. In contrast, new ports frequently display inefficiency because capacity can only be added in relatively big increments and it may take several years of traffic growth before the port is fully utilised. Yet, Table 1 showed that Nigeria buys more than it exports, indicating that the country’s Gross Domestic Product (GDP) may not be economically sound (Saleh et al., 2017).
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