Ports of Eastern Baltic and Russian transit policy: competition and cooperation
The ports of the Baltic states have been handling Russian cargoes for many years. Thus, there is no apparent need for Russia to reroute all freight flows to domestic ports. It was not long ago that Eastern Baltic ports were regarded as ordinary competitors, however, the current geopolitical situation has drastically reshaped the framework for transport cooperation in the region. Competition and cooperation strategies are often equally viable for the ports in the Eastern Baltic Sea. Yet volatility in global markets, the unstable positions of leading exporters and importers, and changes in the economic and political environment call for new strategies and forms of interaction. This study aims to understand to what extent port authorities in the Eastern Baltic can combine competition and cooperation policies when formulating their vision and handling transit cargoes. The article draws on official statistics and Russian and international publications on the theory and practice of transport routing and the functioning of hub infrastructure. The study applies the methods of case study and statistical and comparative analysis to outline the current situation in the Eastern Baltic ports and their potential to attract more freight flows from Russia. The article tests the hypothesis that Eastern Baltic port authorities should pursue a co-opetition strategy. The study concludes that, in the immediate future, this strategy can be employed only in cases of extraordinary circumstances, for example, at peak loads.
1. Efimova, E., Vroblevskaya, S. 2019, Are Eastern Baltic Ports the drivers of Eurasian trade? International Journal of Management and Economics, vol. 55, no. 3, p. 1—14. doi: doi.org/10.2478/ijme-2019-0014.
2. Kholopov, K. V., Rarovskiy, P. E. 2019, Russian market of international container transit in 2019 and its prospects, Rossiiskii vneshneekonomicheskii vestnik [Russian Foreign Economic Journal], no 9, p. 61—68. (in Russ.).
3. Governor of Kuban’: as part of the creation of the southern hub, the capacity of ports in the region will increase by 30%, 2020, Morskie vesti Rossii [Marine News of Russia], no 1, available at: http://www.morvesti.ru/news/1679/83085/ (accessed 20.04.2020) (in Russ.).
4. Antonenko, O. 2019, Latvian oligarch Aivar Lembergs came under US sanction. Port of Ventspils activities threatened, BBC: Russian Service, Riga, 10.12.2019, available at: https://www.bbc.com/russian/features-50729930 (accessed 20.04.2020) (in Russ.).
5. Kurenkov, P., Safronova, A., Kakhrimanova, D. 2018, Logistics of international intermodal freight traffics, Logisticа [Logistics], no 3, p. 24—27 (in Russ.).
6. Demin, V., Karelina, M., Terentyev, A. 2018, Technique to achieve a dynamic balance between the values of capacities of transport-warehouse complexes and cargo flows in logistics systems, Logisticа [Logistics], no 2. p. 32—36 (in Russ.).
7. Zhang, W., Lam, J. S. L. 2013, Maritime cluster evolution based on symbiosis theory and Lotka-Volterra model, Maritime Policy & Management, vol. 40, no. 2, p. 161—176. doi: https://doi.org/10.1080/03088839.2012.757375.
8. Jung, H., Kim, J., Shin, K. S. 2019, Importance Analysis of Decision Making Factors for Selecting International Freight Transportation Mode, The Asian Journal of Shipping and Logistics, vol. 35, no. 1, p. 55—62. doi: https://doi.org/10.1016/j.ajsl.2019.03.008
9. Lee, T.-C., Wu, C.-H., Lee, P. T. W. 2011, Developing the fifth generation ports model. Impacts of the ECFA on seaborne trade volume and policy development for shipping and port industry in Taiwan maritime policy & management, Maritime Policy & Management, vol. 38, no. 2, p. 1—21. doi: https://doi.org/10.1080/03088839.2011.556674.
10. Chen, T., Lee, P. T. W., Notteboom, T. 2013, Shipping line dominance and freight rate practices on trade routes: the case of the far east-south Africa Trade, International Journal of Shipping and Transport Logistics, vol. 5. no. 2. p. 155—173. doi: https://doi.org/10.1504/IJSTL.2013.053233.
11. Chang, Y. T., Lee, P. T. W. 2007, Overview of interport competition: issues and methods, Journal of International Logistics and Trade, vol. 5, no. 1, p. 99—121. doi: https://doi.org/10.24006/jilt.2007.5.1.006.
12. Lee, P. T. W., Lam, J.S.L. 2015, Developing the fifth generation ports model. In: Lee, P. T. W., Cullinane, K. (eds) Dynamic shipping and port developments in the globalized economy, Vol. 2: Emerging Trends in Ports, London, UK, Palgrave MacMillan, p. 186—210. doi: https://doi.org/10.1057/9781137514295.
13. Lee, P.T.W., Lam, J.S.L. 2017, A review of port devolution and governance models with compound eyes approach, Transport Reviews, vol. 37, no. 4, p. 507—520. doi: https://doi.org/10.1080/01441647.2016.1254690.
14. Popodko, G., Nagaeva, O. 2015, Opportunities and Challenges of Large Investment Projects in the New Economy: the Port of Ust-Luga, Balt. Reg., no 3, p. 69—82. doi: 10.5922/2079-8555-2015-3-6.
15. Pavuk, O. 2017, Comparison of port activities of the East coast of the Baltic Sea: 1996—2016, Technology audit and production reserves, vol. 36, no. 4/5, p.5—19. doi: https://doi.org/10.15587/2312-8372.2017.108826.
16. Prokhorov, V., Adukonis, N. 2018, The value of the cargo terminals complex in the port of Ust-Luga for the Russian economy, Logisticа [Logistics], no 3, p. 32—38 (in Russ.).
17. Tirole, J. 1988, Rynki i rynochnaya vlast: teoriya organizatsii promyshlennosti [The Theory of Industrial Organization], in two vol., St. Petersburg, Economic School, 2000, XLII+745 p. (in Russ.).
18. Baumann, O., Eggers, J.P., Stieglitz, N. 2019, Colleagues and Competitors: How Internal Social Comparisons Shape Organizational Search and Adaptation, Administrative Science Quarterly, vol. 64, no. 2, p. 275—309. doi: https://doi.org/10.1177/0001839218766310.
19. Greve, H., Rowley, T., Shipilov, A. 2014, Network advantage: How to unlock value from your alliances and partnerships, New York, NY, John Wiley & Sons, 320 p.
20. Das, T. K. (ed.) 2015, Managing Multipartner Strategic Alliances, Charlotte, NC, Information Age Publishing, 278 p.
21. Reuer, J. J., Lahiri, N. 2014, Searching for alliance partners: Effects of geographic distance on the formation of R&D collaborations, Organization Science, vol. 25, no. 1, p. 283—298. doi: https://doi.org/10.1287/orsc.1120.0805.
22. Chatterjee, S., Matzler, K. 2019, Simple Rules for a Network Efficiency Business Model: the case of Vizio, California Management Review, vol. 61 (2), p. 84—103. doi: https://doi.org/10.1177/0008125618825139.
23. Strese, S., Meuer, M. W., Flatten, T. C., Brettel, M. 2016, Examining cross-functional coopetition as a driver of organizational ambidexterity, Industrial Marketing Management, no. 57, p. 4—11. doi.org/10.1016/j.indmarman.2016.05.008.
24. Bengtsson, M., Kock, S. 2014, Coopetition — Quo vadis? Past accomplishments and future challenges, Industrial Marketing Management, no. 43, p.180—188.doi: doi.org/10.1016/j.indmarman.2014.02.015.
25. Barney, J. B. 1991, Firms resources and sustained competitive advantage, Journal of Management, vol.17, no. 1, p. 99—120. doi. https://doi.org/10.1177/014920639101700108.
26. Leiblein, M. J., Chen, J. S., Posen, H. E. 2017, Resource Allocation in Strategic Factor Markets: A Realistic Real Options Approach to Generating Competitive Advantage, Journal of Management, vol. 43, no. 8, p. 2588—2608. doi: https://doi.org/10.1177/0149206316683778.
27. Teece, D. J., Pisano, G., Shuen, A. 1997, Dynamic Capabilities and Strategic Management, Strategic Management Journal, vol. 18, no. 7, p. 509—533. doi: https://doi.org/10.1142/ 9789812796929_0003.
28. Lado, A. A., Boyd, N. G., Hanlon, S. C. 1997, Competition, cooperation, and the search for economic rents: A syncretic model, Academy of Management Review, vol. 22, no. 1, p.110—141. doi: https://doi.org/10.2307/259226.
29. Nowak, M. A., Sigmund, K., Leibowitz, M. L. 2000, Cooperation versus Competition, Financial Analysts Journal, vol. 56, no. 4, p. 13—22. doi: https://doi.org/10.2469/faj.v.56.n4.2370.
30. Brandenburger, A. M., Nalebuff, B. J. 2012, Co-opetition. Konkurentnoye sotrudnichestvo v biznese [Co-opetition. Competitive business cooperation], Moscow, Omega-L, 352 p. (in Russ.).
31. Petraite, M., Dlugoborskyte, V. 2018, Hidden champions from small catching-up country: leveraging entrepreneurial orientation, organizational capabilities and Global networks In: Sindakis, S., Theodorou, P. (eds) Global Opportunities for Entrepreneurial Growth: Coopetition and Knowledge Dynamics within and Across Firms, UK. Emerald Publishing, p. 91—123. doi: doi.org/10.1108/978-1-78714-501-620171008.
32. Arslan, B. 2018, The interplay of competitive and cooperative behavior and differential benefits in alliances, Strategic Management Journal, no. 39, p. 3222—3246. doi: https://doi.org/10.1002/smj.2731.
33. Chai, L., Li, J., Tangpong, Ch., Clauss, Th. 2020, The interplays of coopetition, conflicts, trust, and efficiency process innovation in vertical B2B relationships, Industrial Marketing Management, no. 85, p. 269—280. doi: doi.org/10.1016/j.indmarman.2019.11.004.
34. Williamson, O. E. 1985, Behavioral Assumptions. In: Williamson, O.E. (ed) The Economic Institutions of Capitalism. Firms, Markets, Relational Contracting, N.Y., The Free Press, p. 44—52.
35. Porter, M. E. 1985, The Competitive Advantage: Creating and Sustaining Superior Performance, NY, Free Press.
36. North, D. C. 1990, Institutions, institutional change and economic performance, New York, Cambridge University Press, 164 p.
37. Jorde, J. M., Teece, D. J. 1989, Competition and cooperation: Striking the right balance, California Management Review, vol. 31, no. 3, p. 25—37. doi: doi.org/110.2307/41166568.
38. Cozzolino, A., Rothaermel, F. T. 2018, Discontinuities, competition, and cooperation: Coopetitive dynamics between incumbents and entrants, Strategic Management Journal, no. 39, p. 3053—3085. doi: doi.org/110.1002/smj.2776.
39. Estrada, I., Faems, D., de Faria, P. 2016, Coopetition and product innovation performance: The role of internal knowledge sharing mechanisms and formal knowledge protection mechanisms, Industrial Marketing Management, vol. 53, no. 2, p. 56—65. doi: doi.org/10.1016/J.INDMARMAN.2015.11.013.
40. Bouncken, R. B., Clauß, T., Fredrich, V. 2016, Product innovation through coopetition in alliances: Singular or plural governance? Industrial Marketing Management, no. 53, p. 77—90. doi: doi.org/10.1016/j.indmarman.2015.11.011.
41. Chernov, V. 2019, Baltic results, PortNews, 21 January 2019, available at: https://portnews.ru/comments/2619/ (accessed 20.04.2020) (in Russ.).
42. Meizer, A. 2018, Ports — 2017: transit games and the search for a bypass of Russia, REGNUM, 07.01.2018, available at: https://regnum.ru/news/2364954.html (accessed 20.04.2020) (in Russ.).
43. Goloviznin, A. 2018, Russian ports do not have enough capacity to take everything from the Baltic. Interview with Business Petersburg, Director of Analytics and Logistics, LLC Morstroytekhnologiya Alexander Goloviznin, Delovoi Peterburg [Business Petersburg], 09.03.2018, available at: https://www.dp.ru/a/2018/09/02/Nam_samim_nikak (accessed 20.04.2020) (in Russ.).