This, to a great extent, is due to their planning efforts to become Hub ports. Japan must put forth a similar effort if it is to create a hub port in the West of Japan that will increase throughput and revenues from increased marine traffic.
New Types of Institutional Arrangements of Japan's Ports
The Council for Ports and Harbors' report on the construction and improvement of Japan's ports and harbors has stressed the need to focus priority investments at ports and harbors of greater importance. The report states that in order to further strengthen and encourage regional authorities' independent efforts for the betterment of local ports and harbors it is necessary not only to widen the range of discretion to be left to such administrations, but also to help them in their effort to upgrade and enhance the efficiency of dock related logistics activities by creating a comprehensive subsidy fund and support businesses. It also says that it is necessary for the nation's port administrative measures to be diversified further as well as to introduce a port-user oriented flexible formula for the charging of port fees.121
Japan's Government, its local port authorities, stevedoring companies, and marine carriers have spent large sums of money to improve infrastructure, superstructure,efficiency and service in their terminals. Japan's national government and its local port authorities need to come up with new institutional arrangements to improve equipment utilization,and operations to be more competitive with other container ports in the East Asia Pacific Region. The Port and Harbor Law needs to be revised in order to accommodate improvements to the construction, control, and operation of container ports in Japan. International carriers are permitted to operate private berths at various terminals under the PTPC. This type of arrangement needs to be expanded.
Laws that restrict private terminal operations limit growth. These laws need to be changed to enable private sector operators to develop relationships that will effectively support multiple global marine carriers. Partial privatization of port operations with the public in mind should be encouraged and implemented to enhance Japan's competitive position by reducing cost to government, shippers, stevedores, carriers, and consignees.
Competitive Terminal Operations
Container terminal costs need to be reduced. The value of the land needs to be considered to evaluate costs as well as ancillary port fees. New information technologies need to be adopted and implemented to offset high labor costs and become more competitive. Fees and the cost of services provided must correspond with services performed. The messages from the shipping companies are that port charges are high and the container terminals need to reduce costs.122 Terminal lease arrangements need to be changed to allow an extended recovery time for a reasonable return on capital investment and to provide a “Win-Win” situation for both the lessee and lessor in a “Landlord Port” to user relationship.
A short lease puts pressure on an operator to pay a higher rent and there is less incentive to invest and develop a container terminal.123 In the U.S., terminal lessees look for long agreements and 30 years or more are not uncommon. If the recovery time were more like 30 years for Japan's container terminals, the annual lease rate would be much less and would attract more carriers.
