Concession Agreements and Market Entry in the Container Terminal Industry

Abstract

In this paper we describe the capabilities and strategies required for obtaining a concession to operate a terminal in a seaport. The extent to which conces- sion procedures create entry barriers and lower the contestability of the market is assessed. Recent studies and policy initiatives have stressed the importance of lowering economic, institutional, and locational entry barriers in seaports. Concession procedures have an effect on market entry. Tenders may lower entry barriers, by ensuring transparency, restricting discrimination and exclu- sivity, and limiting concessions to certain periods. However, tender procedures may also introduce entry barriers in a number of ways, including the require- ment of capabilities and track records to win a tender. The paper examines relevant empirical material of concessions in major container European ports to evaluate these issues. Introduction