Transport Terminal Governance: Main Benefits and Problems

The governance of transport terminals concern their ownership and their operations. Depending on the situation, there is a variety of stakes in terms of the respective public and private roles. While terminal ownership still remain dominantly public (namely through port authorities), the private sector is mainly responsible for the operations through leasing agreements. A common relationship between ownership and operation involves a public-private partnership. However, both the public and private sectors must account for a set of issues:

• Benefits. The public sector tends to provide a leveled playing field with compliance to a variety of safety, security and environmental regulations. This implies that the private sector can be assured of a constant and predictable regulatory framework to plan its operations. A notable advantage of private terminal operators is their high productivity level as they respond to competitive pressures, being able to manage effectively their assets.
• Problems. Since transportation activities must pass through a limited number of terminals, the public sector is prone to have a rent seeking behavior and tax freight to fund its activities. On the other hand, private actors are prone to generate externalities, which are costs they generate, such as congestion, that are assumed by the collectivity. This is potentially the case in a public-private partnership where a private terminal operator does not necessarily assume the full costs of its activities.

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