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Ports in the Storm - Essay Example

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The biggest ship has a capacity that would require an 85 km train. Therefore, improvements on Lisbon harbour would go a long way in raising Europe’s…
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Ports in the Storm
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Ports in the Storm Bigger ships continue to dock great harbours of the world making costs per containers they carry fall by a significant amount. Thebiggest ship has a capacity that would require an 85 km train. Therefore, improvements on Lisbon harbour would go a long way in raising Europe’s economy.
Lisbon harbour is in the country of Portugal in Europe. The strategically placed Portugal is in the major maritime trade routes of the world. The Asia-Europe shipping route touches its coast. In addition, its neighbouring country Spain is well within reach and Portugal can take advantage of its good roads for inland transportation. This is a great opportunity that can really open up Portugal and its neighbouring countries.
European markets will be the first beneficiaries of an improved Lisbon port. First, this is a great investment where European companies can drive their investments. After certain duration, Lisbon harbour will call companies to tender for services like offloading containers, uploading containers, and ship repairs. This will provide business to big and small companies improving on the European economy. Secondly, besides providing business to companies, employment opportunities will increase, as individuals will operate cranes and other machines.
Thirdly, Improvements of Lisbon harbour will allow the bulkiest of the vessels to dock in it. According to Economist magazine, “The bulkiest vessels can carry 14,000 twenty-foot containers that would require a train 85 km if transported by rail” (The economist Newspaper, 2012). Big vessels enhance economies of scale since there is a considerable fall in the cost per container. Cost of industrial raw materials falls as the cost of transportation falls, this eventually causes low cost of products. Fourthly, big ships do not stop in many destinations of Europe. This means that Lisbon harbour will open up a faster means of transportation of bulk materials fastening up the process of production. In addition, consumers and businesses will receive complete products in good time. This will attract prime shippers looking for value, speed, and reliability.
The first beneficiary of an improved Lisbon port is Portugal. This is because as the port expands, Portuguese industries will get cheap raw materials for their productions. Heavy metal industries and those that depend on bulky materials that come from Asia will benefit greatly. In addition, Southern part of Spain will grow because of this port. The growth will come about as goods from Lisbon port are transported via good roads that will carry containers from the southern part to other areas of Spain.
Lisbon harbour strategy is not sound. Since 1984, Portugal have adopted an intermediate public-private model, where the government owns water and land as private developers finance cranes, tugboats, and warehouses. This strategy works well in other countries. However, this is not the case for Portugal since the contracts given to private developers are not on competitive bases and thus no big budge. After the expiry of the contracts period, existing contractors look for an excuse to stay and they are allowed by the government. Increasing competition in the port contracts, encouraging more service providers, and a consideration to sell the land lordship of the harbour are improvement strategies suggested for this port.
References
The Economist Newspaper. (2012). Ports in the Storm. Retrieved from http://www.economist.com/node/21551072 Read More
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