Strategies for Optimizing the Structure of China's Port Logistics Market

China has 18000 kilometers of coastline and 110000 kilometers of inland waterways, undertaking 9% of domestic trade transportation and over 85% of foreign trade cargo transportation. There are 1467 commercial ports along the coast and rivers, including 165 seaports and 1302 river ports. With the increasing frequency of China's foreign trade and economic cooperation, port logistics has achieved unprecedented development, forming a comprehensive three-dimensional international shipping center with core seaports as the main body, river commercial ports as auxiliary, and gathering transportation modes such as highways, railways, aviation, and pipelines.

By the end of 2006, Hong Kong's Hutchison Whampoa, Singapore Ports, Denmark's Maersk Line, and Dutch railway company Zhahua had all entered the Chinese port logistics market, setting up and seeking cooperation in ports in the Yangtze River Delta, Pearl River Delta, and Bohai Rim regions. At the same time, the five major port clusters along the eastern coast of China have completed their respective overall plans and development strategies, adopting strategies of customer segmentation and service deepening. The "local optimum" of port construction in various regions has formed a dual network pattern of domestic and foreign investment in the port logistics market. The integration of resources from domestic and foreign port management organizations has injected competitive vitality into China's port logistics market. However, in order to achieve the "global optimum" of China's port logistics market, it is necessary to be proactive.

1、 The current situation of the development of China's port logistics market

1. The structure of the port logistics market is not entirely reasonable

Although China's port logistics market is a relatively late opened field, the introduction of modern logistics and supply chain management theories and methods has propelled port logistics into the fast lane of development. The formation of industrial clusters in coastal areas has led to an unprecedented stage of development in port logistics infrastructure construction, but the market structure of port logistics is not entirely reasonable. This is mainly manifested in the relatively scattered organization of port logistics, obvious regional characteristics, incomplete formation of economies of scale in industry performance, and uneven ownership structure of port logistics market entities, which directly affect the development level of the industry. A reasonable market structure should be an effective competitive market pattern with both moderate competition and moderate monopoly, in order to achieve both competitive vitality and economies of scale. The level of technology, information, intelligence, and intensification in China's port logistics is relatively low, highlighted by the low scale of port logistics organization and enterprises, and the relatively weak number of private port enterprises. Large logistics enterprises are mostly transformed from traditional state-owned port management institutions. On the one hand, their enterprise, marketization, and industrialization processes are gradually progressing, and the port logistics market is still in a state of imperfect competition market norms, accepting market pressure brought by foreign investment and private port operation organizations. On the other hand, the proportion of non-state-owned investment is relatively low, which directly affects the performance of the port logistics market. China's port logistics enterprises have serious decentralized operations, low market concentration, and relatively homogeneous business models. Although market competition has not yet reached a fierce state, the market structure is not entirely reasonable, resulting in unsatisfactory economies of scale and inefficient allocation of resources.

2. Irregular market behavior in port logistics organization

Market behavior refers to the actions taken by market entities in competition, which are directly constrained by market structure patterns and characteristics. The unreasonable structure of the port logistics market is inevitably reflected in the market behavior and related competitive methods of port logistics enterprises. The obvious fragmentation of market structure has led to severe short-term behavior of market entities. Firstly, bottlenecks in the collection and distribution system constrain the development of port economy. The layout of railways is not suitable for the development of port transportation, and the transportation capacity of bulk cargo transfer bases mainly based on railway collection and distribution is seriously insufficient. The supporting facilities of ports and railways are not perfect. The road network is not sound, and there is a lack of mainline support both inside and outside the port area. The main high-grade highways have not been connected to the port area, resulting in excessive traffic pressure and serious bottlenecks in transportation between the port and the city; The highway level is low, there are few channels, and the collection and distribution capacity is insufficient. Secondly, there is a lack of business entities with strong organizational and coordination capabilities and a considerable service scale to comprehensively integrate with related transportation resources in space. Traditional port logistics organizations have single functions, generally small scales, low service levels, and lack systematic logistics service capabilities, which directly affects the establishment of the cooperation system among port logistics market entities. Finally, local protectionism hinders the flow of raw materials to port enterprises in other regions with higher production efficiency, and hinders high-value and low-priced port enterprises from entering the local area for operation. In short, port logistics organizations operate independently and lack overall market behavior, resulting in a lack and insufficiency of market behavior exploration and innovation.

3. Unreasonable performance of port logistics market

Market performance refers to the results generated by the market behavior of market competitors. Firstly, China has not yet established a standardized and orderly competition mechanism in the port logistics market, with low competition intensity and a lack of effective institutional and market risk constraints on competitive behavior. Currently, the application of competitive methods is still in its immature primary stage. Secondly, the market order is relatively chaotic. The market pattern of regional blockade and departmental segmentation, as well as the entry and exit barriers formed by competition restrictions, limit the inflow and outflow of resources, which will hinder the realization of economies of scale and scope in port logistics and reduce the competitiveness of China's port enterprises. So, breaking regional protectionism is conducive to establishing a mobile market that can reduce inequality between port regions and allow capital, technology, and skilled labor to flow to places with higher investment returns. Again, the economies of scale are not ideal. The domestic port enterprise market has low concentration, small scale, and excessive competition due to dispersion, coupled with weak competitive awareness among dominant large port enterprises. Although Xiamen Port and Zhangzhou Port, Ningbo Port and Zhoushan Port, Shanghai Port and ports in the Yangtze River Basin have all adopted different forms of integration, from a national perspective, to integrate port resources and improve market performance, it is necessary to strengthen and improve the efficiency and level of effective resource utilization, in order to truly achieve comprehensive improvement in port logistics market performance.

2、 The Construction of Market Competition Order for Port Logistics in China

The underlying reason for the poor competition order and performance in the current port logistics market is the non-equilibrium market structure, and the non-standard behavior of market entities is the accelerator of this non-equilibrium. Therefore, the problems in the competition of China's logistics port market should be addressed through a two-step approach of short-term and long-term solutions. In the near future, the main focus is on regulating the market behavior of port logistics enterprises, while also adjusting the market structure. In the long term, the main goal is to rebuild a reasonable port logistics market structure, especially to build an "effective competition" market model that has both moderate competition and moderate monopoly. It is necessary to regulate and constrain the behavior of logistics enterprises through market competition models in order to achieve good market performance. Only in this way can long-term stability be achieved and formed.

1. Standardize port logistics market behavior and improve market competition performance

1) Strengthen competition risk constraints and construct a standardized competition mechanism

Firstly, clarify property rights relationships and focus on enhancing the organizational capabilities of port enterprises. Further clarify the property rights of traditional transformed port logistics enterprises, construct a diversified property rights structure, and form a modern enterprise system that meets the needs of the market economy. We will reform state-owned small and medium-sized port logistics enterprises and optimize their organizational forms through various forms such as restructuring, alliances, mergers, leasing, contract management, shareholding cooperation, and sales. Through mergers and acquisitions, agreements, and other forms, rebuild the relationships between port logistics enterprises, as well as between port logistics enterprises and industrial and commercial enterprises, infrastructure units, etc., strengthen cooperation between enterprises and logistics network construction, form different forms of enterprise alliances, optimize logistics resource allocation, and enhance the core competitiveness of port logistics enterprises.

Secondly, truly implementing the risk constraint of strengthening market competition through the survival of the fittest. If clarifying property rights relationships and enhancing the organizational capacity of port enterprises is to construct risk bearing entities internally to enhance their ability to bear risks, then implementing the survival of the fittest in market competition is an effective way to enhance the risk expectations of port enterprises through external risk constraints. Therefore, in order to establish a competitive mechanism that balances "benefits and risks", it is also necessary to pay attention to enhancing the risk constraints of market competition and improving the risk expectations of port logistics enterprises. One is to create a favorable competitive environment for port logistics enterprises, focusing on achieving profit growth and asset appreciation through market competition, which is a prerequisite for strengthening competition risk constraints. Secondly, we must resolutely sever the "father son" relationship between the government and port enterprises, fully push port logistics organization towards the market, strengthen budget constraints, transform business mechanisms, and continuously rely on our own efforts to improve management level and market competitiveness. The third is to truly activate the bankruptcy and merger mechanism of survival of the fittest, in order to force port logistics enterprises to self restrain their profit motives from the outside, actively avoid unreasonable competitive behavior, and establish a standardized competition mechanism that balances "interests and risks".

2) Strengthening market constraints and regulating market behavior of port logistics organizations

Market constraints should include economic constraints and institutional constraints. Economic constraints refer to the internal constraints of market mechanisms, mainly risk constraints, while institutional constraints refer to the external constraints of market mechanisms, mainly market rules and state intervention and regulation.

Firstly, establish market rules to regulate the market behavior of port logistics enterprises. The rigid constraints on the market behavior of port enterprises are the institutional guarantee for the healthy and orderly development of logistics ports in China. Therefore, it is necessary to use legal, administrative, and economic means to provide standardized codes of conduct for the operation and market competition of port logistics industry, including rules for logistics enterprises to enter and exit the market, rules for large-scale operation, rules for standardized management, rules for anti unfair competition, rules for anti blockade and anti-monopoly, and so on. Only in this way can we strengthen market constraints, regulate the market behavior of port enterprises, and effectively prevent disorderly competition among port enterprises.

Secondly, the combination of corporate behavior and government guidance. On the one hand, as a market-oriented enterprise, we accelerate the transformation, transformation, innovation, and development of traditional logistics enterprises, accelerate the introduction of foreign and private capital, and strengthen the construction of key projects, weak links, and underdeveloped areas; On the other hand, it is necessary to strengthen government support, guidance, and management, formulate an overall strategy for the development of port logistics in China, accelerate the legislative process of logistics organizations, standardize industry management and enterprise self-discipline, establish a free, smooth, standardized and orderly logistics market, and promote the healthy and rapid development of port logistics enterprises. Thirdly, strengthen macroeconomic regulation and achieve the rationalization of the spatial structure of the port logistics industry. With the advent of the era of global economic integration, China's outward oriented economic development strategy inevitably requires the integration of port logistics industry clusters into the mainstream space of the global economy. The rationalization of the space of port logistics industry is mainly reflected in the construction of a port cluster spatial organization and management model composed of government, port cities, and logistics elite enterprises with cross-border or cross regional networks. Effective spatial management can only be achieved by establishing a mechanism of negotiation and collaboration among the three parties based on their respective controlled resources. The second is that the spatial structure of port logistics should include four levels of spatial structure: a port regional cooperation system centered on core ports, a port city logistics cooperation system established with individual ports as the core, an outward oriented international logistics system centered on port clusters, and a port logistics corridor system.

2. Adjust the structure of the port logistics market and build an effective competitive model

Given the characteristics of the port logistics industry, an effective competitive market is an ideal monopolistic competition model for the port logistics market. And adjustments need to be made in the following aspects:

Firstly, in terms of market structure, it is necessary to vigorously promote the merger and alliance of port logistics enterprises, forming typical forms of logistics market industry organization: logistics service alliances, supply chain organizational networks, and vertical integration of logistics, so that competition and cooperation in the port logistics market are achieved through the aforementioned organizations. This market structure and industrial organization form are market choices for improving logistics efficiency, reducing logistics costs, and achieving effective competition. In this regard, Ningbo Port has a certain representativeness. By utilizing its own advantages, leveraging private capital, actively adjusting strategic goals, and joining forces with Zhoushan Port to build the "Ningbo Zhoushan" integrated project. Qingdao and Rizhao have established integrated container management, achieving economies of scale through complementary advantages and strong alliances.

In addition, the Port Law encourages domestic and foreign economic organizations or individuals to invest and operate ports in accordance with the law, expanding the channels for port investment and construction in China. For example, the Pan Pearl River Delta, Yangtze River Delta, and Bohai Rim regions strengthen cooperation and coordination, coordinate planning, and jointly create a "big environment" for the development of regional port logistics, providing rich practical examples for the establishment and improvement of diversified mechanisms for port construction investment and operation entities in China.

Secondly, from the perspective of market behavior, the production capacity of ports continues to strengthen, and the construction of specialized container terminal berths will be the focus of port construction. Due to the diversification of the international market and the increase in bulk goods, coupled with the development of the western region, the rise of the central region, and the rapid development of the Yangtze River Delta economy, it will further promote the exchange of goods between the east and the west, resulting in a shortage of supply in the port cargo transportation market. These factors will put great pressure on the overall throughput capacity and layout of coastal ports, as well as the construction of dock berths. Secondly, actively cultivate and develop the port logistics service market. Port enterprises should start from reality, based on their own comparative advantages, closely focus on the needs of users, and provide high-quality and efficient partial or full logistics services. At the same time, it is necessary to strengthen the cooperation between logistics enterprises, and port logistics enterprises should form cooperative alliances with transportation, warehousing, freight forwarding, intermodal transportation, container transportation and other enterprises to enhance the market competitiveness of port logistics enterprises. Advocate for the diversification of the operating and investment entities of port logistics enterprises, as well as the diversification of logistics service forms. Finally, it is necessary to strengthen the construction of port regional integration and promote the development of port economy. Establish a sound mechanism for regional coordinated development, break down departmental and regional boundaries, promote cooperation and interaction between port logistics enterprises in different regions and professional logistics organizations in the port area, hinterland, and abroad, and continuously improve and optimize the market structure of port logistics.

Thirdly, from the perspective of market effectiveness: firstly, establish a port logistics management system with Chinese characteristics. The government can establish a national port logistics management coordination agency based on actual conditions, to coordinate and guide the port logistics industry from a macro and policy perspective, in order to fundamentally change the fragmented situation of multiple leadership, individual efforts, and lack of overall coordination. Local governments should focus on strengthening communication and connections between the government and enterprises, establishing a system of communication between the government and logistics enterprises, and forming a standardized and orderly market competition mechanism. Secondly, the development of port logistics enterprises must adhere to the principle of enterprises as the main body, and through various forms such as restructuring, listing, mergers, alliances, and reorganizations, quickly form a group of logistics companies with outstanding main business and strong core competitiveness, in order to form a logistics network with high coverage. The port logistics organization focuses on enhancing core competitiveness, clarifying its business and market positioning, and accelerating the comprehensive upgrading of logistics technology for enterprises. Finally, port logistics enterprises achieve economies of scale. Logistics enterprises with different core business capabilities can form a collaborative network of logistics enterprises through vertical and horizontal integration and the role of market mechanisms.

3、 Optimization Strategy for Port Logistics Market Structure

1. The government provides policy and legal support for the development of port logistics

1) Strengthen and improve port logistics policies and laws and regulations

When formulating professional logistics plans and related policy measures, attention should be paid to the mutual matching of policies, as well as the combination of scientificity, practicality, and operability. Policy guidance should accelerate the introduction of competition mechanisms and simplify relevant procedures and formalities. Following the characteristics and laws of logistics development, create a fair, just, and open market environment.

2) Government departments need to transform their functions and strengthen their service awareness

Actively promote the use of modern management, information technology, and high-tech means, establish a coordinated linkage mechanism between effective government supervision and efficient enterprise actions, optimize the operational processes and customs clearance environment of document flow, cargo flow, passenger flow, fund flow, and information flow, and improve the efficiency of port work and the speed of customs clearance for import and export goods. It mainly involves port inspection units, port management departments, foreign trade production, operation and service enterprises, as well as multiple departments such as taxation, banking, and foreign exchange management. Simplify customs clearance procedures and achieve a "one-stop" service for port logistics.

2. Actively guide port logistics organizations to align with international standards

1) Combining cooperation and competition in domestic and international port logistics industry

On the one hand, we need to accelerate the pace of opening up port logistics to the outside world, introduce world-class port management organizations through various forms such as cooperation, joint ventures, and joint ventures, strengthen the construction of large-scale warehousing, processing, and other logistics infrastructure, and improve the logistics market structure. At the same time, introducing international advanced management experience and methods, activating the operation mechanism of the port logistics market, and regulating the behavior of logistics enterprises. On the other hand, through market operations, adjustments, mergers, and combinations, support and develop a group of logistics enterprises, logistics parks, and distribution centers with economic strength, operating in accordance with international practices, and having a reasonable network structure, to undertake international logistics tasks that match the trading countries.

2) Combining state-owned and private port logistics industries

State owned port logistics enterprises must deepen reforms, transform mechanisms, enhance their strength, and accelerate the process of marketization. Give full play to the leading and exemplary role of state-owned port logistics with mainline transportation as the main body. At the same time, relevant policies should be formulated to encourage and support private capital and enterprises to enter the port logistics industry. Promote a rational market structure for port logistics that covers state-owned, private, and foreign-funded organizations, forming a market pattern of mutual complementarity, competition, balance, and common development.

3. Enhance the service awareness of port enterprises

Logistics companies should closely integrate logistics services with their production and marketing, strengthen service awareness, and improve service functions. Based on customer needs and high-quality transportation services, we provide personalized logistics services to customers, and carry out diversified logistics service projects in response to changes in the development layout of the port industry. In addition, it is necessary to establish a comprehensive indicator evaluation system for port logistics services to improve the service level of port logistics organizations and regulate their market behavior.

4. Establish awareness of technological innovation in port logistics

Information network technology is an important component of the port logistics system and a crucial technical guarantee for improving logistics service efficiency. Actively utilizing technologies such as EDI and the internet, connecting enterprise branches through network platforms and information technology to achieve resource and information sharing, and conducting real-time tracking, effective control, and full process management of various logistics links. Accelerate the promotion and application of advanced technologies, widely adopt standardized, serialized, and standardized transportation, warehousing, loading and unloading, handling, packaging equipment and facilities, and barcode technologies.

5. Introduce and cultivate port logistics talents

Through various methods such as short-term and long-term training, on-the-job training and school training, we aim to cultivate a large number of logistics management personnel and professional technical personnel who are familiar with logistics business and have interdisciplinary comprehensive abilities. Port logistics enterprises should integrate capital and technology with research institutions and colleges, leverage their respective strengths and advantages, form a community of shared interests, and achieve close integration and mutual promotion of logistics, education, and research for common development. Guo Libin and Li Xuegong from "Comprehensive Transportation"