Specialization Index

Author : Dr. Claude Comtois

1. The Index

In transport, to find out if a terminal is specialized in the transshipment and/or handling of a particular kind of merchandise or if, inversely, it transfers a wide variety of merchandise, we can calculate a specialization index. For example, the index can be used to know if a port is specialized in the handling of a certain type of product (e.g. containers) or if it handles a wide range of merchandise. As a consequence, such an index is quite versatile and has a variety of applications; it informs geographers on the activities of any type of terminal (port, train and airport). In the case of an airport terminal, one could ask if a given airport deals with only a single type of flights/passengers (local, national, international, etc) or if it welcomes several. The specialization index (SI) is calculated using the following formula:

which is the total of squares of tonnage (or monetary value) of each type of merchandise i (ti) handled at a terminal over the square of the total volume tonnage (or monetary value) of merchandise handled at the terminal.

So, if the specialization index tends toward 1, such a result indicates that the terminal is highly specialized. If, inversely, the index tends toward 0, it means that the terminal's activity is diversified. Thus, the specialization index is called upon to appreciate the degree of specialization/diversification of a port, an airport, a train station or any type of terminal.

2. Example

To show how to calculate the specialization index, we will examine the case of the port of Sept-Iles/Pointe-Noire and the merchandise handled at this port.

	Domestic		International		Domestic and international
Merchandise	Loaded	Unloaded	Loaded	Unloaded	Handled	Containerized
	tons	tons	tons	tons	tons	%
Logs, bolts, and other woods	-	-	2	-	2	-
Wood pulp	-	-	1 413	-	1 413	-
Iron ore	3 415 905	-	16 675 108	-	20 091 013	-
Iron, steel, and alloys	12 129	-	5 617	94	17 840	0.2
Aluminum ore and basic products	-	-	180 420	413 861	594 281	-
Other ores & base metal products	35 243	-	61 060	630	96 933	0.2
Coal	-	-	156 550	153 190	309 740	-
Limestone	-	143 045	-	186 869	329 914	-
Salt	-	10 993	-	-	10 993	-
Auth. Non-metallic mineral products.	2 060	204 496	1 494	165 918	373 958	0.8
Miscellaneous chemicals	-	3 559	28	3 037	6 624	0.4
Gasoline	2 539	43 890	-	-	46 429	-
Fuel oil	-	280 038	-	17 135	297 173	-
Coke of petroleum and coal	-	60 766	54 863	287 987	403 617	-
Cement and related products	-	-	-	127	127	-
Machinery/equp & misc. cargo	2 629	19	89	1 136	3 873	0.4
Total	3 470 505	746 796	17 136 645	1 229 985	22 583 930	-

Source: Statistics Canada, Cat. No. 54-205.

Thus, by using the above equation, we find a specialization index of 0.79. Obtaining an index drawing close to 1, we can conclude that the port of Sept-Iles/Pointe-Noire is highly specialized. By looking at the table, we see immediately that the handling of iron ore is the port's specialty. It can be noted that the same calculation can be performed using the loaded and unloaded products or with the domestic and international traffic.

Click here to download a file containing the above table.

Copyright © 1998-2008, Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic) and on any media without consent. Permission MUST be requested prior to use.

04/06/08