The role of port privatization in supply chain integration in developing countries: A case study approach

This research involved the exploration of supply chain integration in developing countries, specifically it manifests in privatization of the port sector of the economy. The purpose of the research is to discover what results occur when at least one or more terminals in a seaport is privatized in a developing country. The results were measured along four dimensions: (1) degree of privatization; (2) port operational performance and efficiency; (3) supply chain integration; and (4) economic efficiency and competitiveness. The study investigated five propositions: Proposition 1. Private participation in port facilities improves port operational efficiency. Proposition 2. An operationally efficient port improves supply chain integration. Proposition 3. The degree of supply chain integration varies with the port privatization model used. Proposition 4. Private operators and managers of ports form inter-organizational relationships with supply chain members in order to improve their operational efficiency. Proposition 5. Supply chain integration leads to economic efficiency and competitiveness.; Following Yin (1994), a triangulated case study methodology was used. Buenos Aires in Argentina, Buena Ventura and Cartagena in Colombia, and Bangkok and Laem Chabang in Thailand were studied. Three methods of data collection were employed: semi-structured interviews, a short questionnaire, and secondary and archival data. The evidence from the case studies supported three of the five propositions. This research established that private port operators in developing countries are using supply chain management concepts. The research also showed that port privatization improves supply chain integration as well as operational efficiency and performance. Private operators of port facilities tend to form inter-organizational relationships in order to improve operational efficiency. Operational efficiency is perceived as the way to attract customers, thus improving the competitiveness of the port. Developing country governments also see improving the port sector as a way to improve their economies. This research extends the scope of supply chain management to the national level, including government agencies and their interaction with the private sector. It also begins to build a theory of the effects of port privatization on supply chain integration in developing countries.