Sustainable shipping : port strategies to drive environmental upgrading in the shipping sector

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Sustainable Shipping: Port Strategies to Drive Environmental Upgrading in

the Shipping Sector

Master Thesis Political Science, Political Economy

Research Project: Transnational Sustainability Governance

June 2019

Romy Loos (10775897)

Supervisor: Philip Schleifer

Second Reader: Luc Fransen

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List of abbreviations

ADC – Alternatieven, Dwingende reden, Compenserende maatregelen CCR – Commissie voor de Rijnvaart

CCWG – Clean Cargo Working Group CO2 – Carbon dioxide

CSR – Corporate social responsibility

EICB - Expertise- en InnovatieCentrum Binnenvaart ESI – Environmental Ship Index

ETA – Estimed Time of Arrival EU – European Union

GHG – Greenhouse gas GVC – Global value chain HLH – Hamburg-Le Havre

IAPH – International Association of Ports and Harbors IMO – International Maritime Organization

LNG – Liquefied Natural Gas

NEPTUNES – Noise Emitted by Seagoing Ships NGO – Non-governmental organization

NOx – Nitrous oxides

OPS – On-shore power supply PoR – Port of Rotterdam

SDG – Sustainable Development Goal SOx – Sulphur oxides

SSI – Sustainable Shipping Initiative TBL – Triple Bottom Line

WPCAP – World Ports Climate Action Program WPCI – World Ports Climate Initiative

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1. Introduction

1.1. Sustainable transportation

For a long time, shipping has been seen as the most green mode of transport. And it still is. In comparison to rail, truck or air transport the emission of CO2 (carbon dioxide) per ton-mile is

relatively low. Besides, shipping is considered the world’s most efficient form of transportation (Lister et al. 2015: 185; Scott 2014). Nevertheless, more than ninety percent of international trade volume is transported by sea and by that the environmental footprint of the sector is considerable. Not only air emissions have a major environmental impact, but oil spills, invasive species, noise and the dumping of waste materials also leave their mark on the environment (Lister et al. 2015: 185).

During the past decade, people have become more aware of how polluting the shipping industry actually is. The rising awareness has led to stricter regulation, both at the intergovernmental and private level (Scott 2014). Even the shipping industry itself is increasingly aware of the need to act, but there are many actors involved, and they do not necessarily share the same interests and vision when it comes to lowering external costs. Actors that are included in the shipping industry are divided in different groups, such as those who transport the goods (ocean carriers and terminal operations), those who arrange the movement of goods (shipping agents and logistics providers) and those who own the goods that are being shipped (cargo-owners) (Hall and Jacobs 2010: 1107). This thesis will focus on the greening process of both ocean-going and sea-going vessels, referring to them as the shipping sector.

Although the shipping sector is becoming more aware of the fact that it needs to behave in a more responsible way, it is still lacking behind other modes of transports when it comes to greening its activities. Both public and private actors inside and outside the chain are trying to stimulate this greening process, examples being the European Union (EU) or private initiatives such as the Sustainable Shipping Initiative (SSI) (Lister et al. 2015: 190; Scott 2014; www.ec.europa.eu). The many different regulations and initiatives are, however, confusing for the sector since it doesn’t know which way to follow (Lister et al. 2015: 191). Nevertheless, within this web of actors there is one group of actors that has a unique position within the shipping sector, and these are ports. Ports form crucial nodes between different parts of global value chains (GVCs), especially between onshore and offshore transportation as is shown by figure 1 (Denktas-Sakar and Karatas-Cetin 2012: 301; Annual Report Port of Rotterdam 2018). It is said that they have a directing role in GVCs since they have an overarching view of the playing field (Interview 5). Thus, it is assumed that they have the potential to play an important role in the greening of maritime shipping.

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Figure 1. Global Value Chain (source: Annual Report Port of Rotterdam 2018)

1.2. Environmental upgrading in global value chains

In academic literature, a framework has been developed that is called the ‘Global Value Chain’. As is illustrated by figure 1, GVCs represent all the activities that are necessary to bring a product from its conception to end use (Gereffi and Fernandez-Stark 2016: 7). Nowadays, these activities are globally dispersed among many different countries, which makes it harder to organize them (Gereffi and Lee 2016: 27). Using this framework, many academics intensively study how actors move up the value chain, which means that they are improving their position in the global economy by capturing more of the value that is created in the chain (Golini et al. 2018; Khattak et al. 2015: Poulsen et al. 2016). Creating more value can, however, refer to different types of sources. On the one hand, actors can involve in economic upgrading. This means that they are trying to increase their economic gains by, for instance, change their products or production processes (Humphrey and Schmitz 2002: 1020). On the other hand, they can also be concerned with social or environmental upgrading. Whereas social upgrading leads to the improvement of social (working) conditions, environmental upgrading refers to actors trying to avoid or reduce the environmental damage that stems from their products, processes or managerial systems (De Marchi et al. 2013: 65; Pyke and Lund-Thomsen 2016: 54).

Ports are crucial hubs in the functioning of GVCs, yet there has been done little research how far their power reaches when it comes to the environmental upgrading of maritime transport (Afshin Mansouri et al. 2015: 16; Poulsen et al. 2018: 83). Against this background, the purpose of this research is to better understand if ports have indeed enough authority to force environmental upgrading in maritime shipping and to see what strategies they use to achieve this. Hereby, this study will be guided by the framework of Kaplinsky and Morris (2017) which explains three different approaches to drive environmental upgrading in supply chains. All these approaches start with the implementation of regulation (an enforcing strategy) and sometimes this is accompanied by supportive strategies such as the provision of financial or technical assistance to enable actors to comply with regulation (idem: 8-9).

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In order to illustrate what ports can do to foster environmental upgrading in the shipping sector, this study draws primarily on the case of the Port of Rotterdam (PoR). The PoR is, thanks to its easy access for big ships from the Atlantic and for barges from the interior, the biggest port in Europe (www.economist.com). The Port Authority is constantly trying to improve the Ports’ competitive position as a logistics hub and world-class industrial complex, and is therefore also known for being a pioneer in the area of innovation and sustainability (Port of Rotterdam 2019). For example, it is leading the current energy transition and is has played a major role in the introduction of liquefied natural gas (LNG) as an alternative fuel [Interview 1; Interview 3; Interview 6; Port of Rotterdam 2019]. The analysis of the PoR will focus on the different strategies that the Port is following to make seagoing and inland vessels more sustainable, and will also ask for what reasons they have chosen to follow these strategies. From this case analysis a set of strategies will be derived that ports can use to drive environmental upgrading in GVCs, by which it can serve as an example for other ports that are aiming to fulfill a similar role.

1.3. Research question

The focus of this research is on understanding the different possible strategies that actors, and

specifically ports, can use to drive environmental upgrading along GVCs. It strives to do so by looking at the strategies adopted by the PoR, thereby focusing on what factors hinder or facilitate the uptake of these strategies. In order to conduct this research the following research question is formulated:

‘’To what extent do ports have the ability to drive environmental upgrading in maritime shipping?’’

To be able to answer the research question in an applicable way, the research question is divided in a number of sub-questions:

‘’What strategies do ports use to drive environmental upgrading in maritime shipping?’’

‘’For what reasons have ports chosen their current strategies to drive environmental upgrading in maritime shipping?’’

1.4. Key findings

Building on existing literature about compliance with (environmental) regulation and the role of assistance, this study identifies four categories of supportive strategies that enable actors to drive environmental upgrading along the value chain. These strategies are categorized as financial assistance, technical assistance, stakeholder management and lobbying among public actors outside

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the chain. The first two were already present within the literature, but the other were identified while conducting this research. This case study also found that whereas supportive strategies were first seen as complementary tools to enforcing strategies such as regulation, they can also serve as independent strategies. Namely, the PoR is employing many different supportive strategies, but it is has barely developed environmental regulation. Nonetheless, the importance of regulation is indeed

acknowledged, only this study showed that it is not necessarily the same actor that has to provide both enforcing and supportive strategies. In the case of the shipping sector, the International Maritime Organization (IMO) seems to be the most suited actor for implementing environmental regulation because it has a global reach and therefore is better able to deal with the highly transnational nature of maritime shipping. In contrast, the PoR doesn’t have the position to use enforcing strategies for several reasons. On the one hand, the PoR has a public function which means that the water in the port area should be accessible for everyone. Because of the four freedoms of the EU (free movement of goods, services, capital and labour), it is therefore not allowed to refuse entrance to shipping companies based on environmental regulation. On the other hand, it also has a private function as a landlord that is renting the ground in the port area to different companies such as terminals. It could implement environmental regulation on the shipping sector via the companies in the port area, but there exists a great risk that its competitive position will then deteriorate. However, what also became clear while conducting this research, is that shipping companies lack the knowledge and financial means to start upgrading their activities. Hence, the support that is being offered by the PoR is also of great concern. Consequently, this study concludes that to achieve environmental upgrading both supportive and enforcing strategies are necessary and that they can be implemented by different actors in- and outside the value chain. Therefore, greater collaboration among these actors is required to drive environmental upgrading in GVCs.

1.5. Societal and academic relevance

The outcomes of this study are of both societal and academic relevance. With regard to societal relevance, it is important to note that maritime transport is not only an enormous polluter with a great global scope, but it is expected that the sector, and thus maritime emissions, will grow in coming decades (Poulsen et al. 2018: 83; Scott 2014). It is therefore important to minimize the environmental impact of this sector. Since ports fulfil a key function within GVCs, and more than eighty percent of world trade passes the entrance of ports, it is worth examining how they interact with seagoing and inland vessels (Poulsen et al. 2018: 83).

At the academic level, this study enriches the literature on environmental upgrading within GVCs by seeking to give a better understanding of the activities, governance mechanisms and regulations involved in environmental upgrading. Although economic upgrading has been studied thoroughly, environmental upgrading is a relatively new concept which still remains under-researched (Khattak et

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al. 2015: 32). Moreover, until recently there has been done relatively little research to maritime sustainability. The number of papers published on this topic has only started to rise since a few years and still many of them are more technical instead of policy oriented (Afshin Mansouri 2015: 11). Most academics that did look at policy oriented solutions for greening maritime shipping focused on the role of the IMO, the impact of private initiatives and the alignment of these two governance mechanisms. With regard to ports, a lot of literature has concentrated on greening efforts within the port area and not on driving environmental upgrading among shipping companies. One of the first enhanced studies on the potential of ports in the greening of maritime transport was conducted by Poulsen, Ponte and Sornn-Friese (2018) and investigated at what point ports felt the urge to get involved in environmental upgrading. They concluded that whenever issue visibility was high, and relatively few actors were needed to tackle an environmental issue, ports would indeed be activated. However, issue visibility of pollution by ships at sea is very low, and the study therefore didn’t solely concentrate on the shipping sector, but also on activities within the port area. Moreover, it did study when ports decide to drive environmental upgrading in maritime shipping, but it didn’t elaborate on how they do this and why they choose certain strategies. Therefore, this study tries to fill this gap by advancing knowledge on strategies to drive environmental upgrading along value chains.

1.6. Structure

This study is structured in three parts. The first part consists of a literature review, the analytical framework and the methodological approach. Chapter 2 provides a thorough review of the literature on maritime shipping in general, and on the efforts made by ports to become more sustainable. Chapter 3 then lays out the theoretical approach of this research. It will explain what the framework of GVCs exactly entails, and how this relates to the dependent variable in this thesis, namely strategies to drive environmental upgrading. Chapter 4 includes a discussion of the methodological approach, the chosen research design, case selection and data collection process. This discussion is complemented by a reflection on possible validity, reliability and replicability implications.

The second part contains the empirical findings of this study. Chapter 5 will first outline the multiple strategies that the PoR is using to stimulate environmental upgrading in the shipping sector.

Subsequently, Chapter 6 will explain what barriers and limitations the Port is facing in fulfilling their role as drivers of environmental upgrading, and thus why it has chosen to follow the strategies that it is now using.

The third and last part of this research includes a discussion of the main findings. Chapter 7 will first link the findings back to the analytical framework, and Chapter 8 will then conclude this thesis by highlighting a program for future research directions.

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2. Literature review

This chapter will give an overview of the existing literature on maritime shipping, with a focus on sustainability. After providing a short summary of the written work on maritime shipping in general, it will continue by focusing on the role of ports.

2.1. Maritime shipping

In 2015, Afshin Mansouri et al. published an article that gave a systemic overview of the literature on environmental sustainability in maritime shipping. It showed that until recently, very few research had been done within this field. This is surprising, since the shipping sector is of great importance for the global economy and its ecological footprint is considerable (Lister et al. 2015: 185-186). Nonetheless, interest among researchers in sustainable shipping operations has been growing, although many of them are still more focused on technical instead of policy oriented solutions to foster sustainability (Davarzani et al. 2016). Technical solutions include innovations and/ or operations such as slow steaming, weather routing and speed optimization (Afshin Mansouri et al. 2015: 8).

Figure 2: Classification on literature on sustainable maritime based on solution approach (Afshin Mansouri et al. 2015: 11).

On a policy level, academics have examined the role of the IMO as a driver for the greening of the shipping sector. This international organization has a mandate to promote maritime safety and environmental protection and therefore would seem the appropriate actor to enhance sustainability within the maritime transport sector. However, they have concluded that enforcement of its regulations are weak, which has led regions such as the EU to act in a unilateral way (Lister et al. 2015). This regional way of governing is in strong contrast with the transnational nature of the shipping sector, and is believed to add costs and complexity to ship operations. For this reason, ship-owners prefer global regulation over regional regulation (idem: 191). The same problem accounts for private initiatives such as the SSI or the Clean Cargo Working Group (CCWG). Although more and more shipping companies are becoming members of such groups, the existence of the many different initiatives also seems to have a confusing effect, because they do not follow the exact same standards (idem:

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192-193). Subsequently, Lister (2015: 126) finds in her own research that their lies a potential in viewing these private initiatives as complements instead of substitutes to regulation by the IMO. Until now, the IMO has had a hard time to get member states to ratify, legislate and enforce compliance. Nonetheless, the IMO does have the means to scale up private initiatives and widen their scope in order to

strengthen their capacity and legitimacy as supplementary transnational governance mechanisms. Another study by Poulsen, Ponte and Lister (2016) also recognizes that closer collaboration between voluntary green shipping initiatives and public regulation is crucial to further drive environmental upgrading. Within their research, they have specifically studied the ability of buyer-driven greening, concluding that consumer-facing companies with reputational risks are most likely to drive

environmental upgrading. However, they mainly do so by launching or participating in industry-led and multi-stakeholder initiatives, but very few of them base their selection for shipping services on the environmental performance of shipping companies. Nevertheless, Parviainen et al. (2018) conclude that there lies a potential for multi-stakeholder initiatives to promote environmental and social responsibility in the shipping sector. They find that the collaboration between actors such as non-governmental organizations (NGOs), consumers, employees and academia can ‘’support the

transparency, legitimacy, and enforcement of practices, as well as widen the scope and focus of CSR (corporate social responsibility) initiatives and practices by focusing on a broad range of social and environmental issues (idem: 49)’’. More important, they also draw the conclusion that pressure from multi-stakeholder initiatives can lead to improved regulations, which is welcomed by the shipping sector itself (ibid.).

2.2. Ports

Since its crucial place in the GVC, the academic world is increasingly turning its attention towards to role of ports when it comes to environmental upgrading. This process takes place ‘’when actors move towards a production system that avoids or reduces the environmental damage from their products, processes or managerial systems’’ (De Marchi et al. 2013: 65). What is striking, is that most studies focus on how ports are greening their own business, instead of concentrating on how they influence other parts of the GVC. Already in 2008, Pettit analyzed what the policy looked like for port development, emphasizing the attitude of ports towards their role in creating sustainable growth. Another example of a study that focused on ports themselves was conducted by Denktas-Sakar and Karatas-Cetin (2012). They examined how supply chain stakeholders actually influence the

sustainability of ports themselves. Kotowska (2016) stressed the fact that seaports form a link between onshore and offshore transportation and by that have a huge environmental impact on the cities that are centered around ports. For that reason, her study focuses on how seaport authorities can create sustainable development in port cities. The same accounts for Frantzeskaki et al. (2014), although they concentrate their study on the ability of partnerships to realize urban sustainability. Another interesting subject of study is energy management in seaports, since more ports are actually developing their own

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energy management strategies. Acciaro et al. (2014) explore this topic by analyzing the experience of two European ports, namely Hamburg and Genoa. Lastly, there also exist studies which have a broader point of view, such as the one from Puig et al. (2015). They analyze what the top environmental priorities of European ports are and how their actual environmental performance is.

In 2014, Gibbs et al. were one of the academics that started to shift the focus beyond ports’ organizational and physical boundaries, stating that ‘’port efficiency influences energy efficiency along the entire value chain’’. Since air emissions by ships are far greater than those generated by ports themselves, ports can increase their impact by focusing on lowering air emissions by ships. One of the solutions to achieve this could be, according to Gibbs et al. (2014), on-shore power supply (OPS). This means that when a ship lies at berth in the port it will not use its own engine, but it will rely on electricity to support onboard activities like (un)loading and lighting. However, a more thorough case study by Tseng and Pilcher (2015) concluded that while OPS would indeed lead to less emissions, initial costs to facilitate this would be so high that legislation by the government is

necessary to make this workable. Fenton (2017) draws the same conclusion, noticing that ports in Germany and Sweden are at the forefront of using OPS because the EU has allowed them to reduce tax rates on electricity use if electricity is used for OPS. Nonetheless, OPS is still not widely adopted elsewhere because of the high costs. Another option that also comes across in literature very often, and that is meant to promote green shipping, is the use of green fees. These are discounts that sustainable ships receive on port dues (Fenton 2017; 274; Gibbs et al. 2014: 343; Portopia 2017: 37). Other ways of financial support have not been reported yet.

Until recently, very little studies solely focused on the role of ports in the greening of maritime transport. Means to promote green shipping are often shortly mentioned somewhere in a study that actually has a different focus, for instance on energy efficiency in supply chains. Moreover, it appears that academics often refer to the same means, such as OPS and green fees. The first ones that actually dedicated a whole study to environmental upgrading in maritime shipping and the involvement of ports were Poulsen, Ponte and Sornn-Friese (2018). Their study examines what factors facilitate or hinder the uptake of environmental upgrading tools by ports, with a focus on air emissions. They conclude that low tool implementation complexity combined with high level of emission visibility makes it easier for ports to stimulate environmental upgrading. In other words: if there are relatively little actors needed to combat an environmental issue, and if this same issue is highly visible to society, then ports will decide to drive environmental upgrading in maritime shipping by fighting this specific matter. Nonetheless, as appears from the study, by ‘maritime shipping’ the authors do not solely mean the shipping sector (ocean-going and inland shipping vessels), but they also include ports’ own operations and the activities of companies that are located within ports. There lies less focus on the shipping sector itself, but this is not surprising because, as stated in their conclusion, ‘’emissions of

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greenhouse gas (GHG) and air pollutants from ships at sea have low visibility and receive less attention (idem: 90)’’. Therefore, ports are putting more effort in making activities in the port area more sustainable than outside the port area. Nonetheless, they end their study with the same

conclusion as Gibbs et al. (2014), saying that many greening efforts take place in ports themselves, but that the highest effect will be achieved if ports stimulate environmental upgrading outside the port area in the shipping sector.

Their obviously lies a great potential for reducing the environmental footprint in value chains by facilitating environmental upgrading in the shipping sector. Although some tools to achieve this, such as OPS, are already shortly mentioned within different studies, there doesn’t exist a study that maps out the exact strategies and instruments that ports are currently using to drive environmental upgrading in the shipping sector and the limitations they face in doing so, a subject that was already identified as a gap by Afshin Manoursi et al. in 2015 (16). Therefore, this thesis will try to fill this gap by analyzing the strategies that the PoR is currently using to make ocean-going and inland shipping vessels more sustainable, and by studying the reasons why it has chosen these specific strategies. It is thus excluding greening efforts within a ports’ own operations, and it also doesn’t look at industry companies that are located in port areas. In doing so, this study aims to focus on that specific part of the value chain were lies one of the greatest potentials for reducing its environmental impact, namely the shipping sector.

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3. Analytical framework

This chapter will introduce the concept of GVCs and also define the concept of environmental upgrading. To understand how this GVC model can be used as an analytical tool, three of its main dimensions will be explained in a more in-depth way, namely governance, institutions and upgrading. The paragraph on upgrading will focus on the concept of environmental upgrading. Then, within this GVC model, a framework will be established that explains the different strategies that GVC operators can use to drive environmental upgrading among other actors in the value chain. Subsequently, this framework on strategies will be used to guide the empirical chapters of this thesis.

3.1. Global value chains

Today’s global economy is becoming more and more complex. The many different activities that are necessary to realize a product don’t take place within one firm or even within one country anymore, but they are geographically dispersed. Industries consist of many different actors from different countries that all interact with each other, which leads to interesting dynamics (Gereffi and Lee 2016: 27). To get a grip on these complex industry interactions, extensive research and theory-building has taken place, which has led scientists to develop a framework which is called the ‘global value chain (GVC)’. According to Gereffi and Fernandez-Stark (2016: 7) this value chain can be described as follows:

‘’The global value chain describes the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond. This includes activities such as research and development (R&D), design, production marketing, distribution and support to final consumer’’.

It is thus a helpful tool to trace the shifting patterns of global production, link geographically dispersed activities and actors within a single industry, and to understand the roles all these different actors play (idem: 6).

Following the GVC methodology, one can distinguish six basic dimensions of which a GVC consists. Three of them are characterized as global (top-down) elements, the other three are local (bottom-up) in nature. The global dimensions are known as input-output structure, geographic scope and governance structure. The local dimensions are known as upgrading, institutional context and industry

stakeholders. Within academic literature, governance is seen as the key concept of the top-down view, and it focuses primarily on lead firms and the organization of international industries. On the other side, upgrading is perceived as the key concept of the bottom-up view, and focuses on how economic stakeholders try to maintain or improve their positions in the global economy (Gereffi and

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Fernandez-Stark 2016: 7). Recently, there has been a call for more attention for the (local) institutional context, since it is believed that actors outside the chain, such as international and regional institutions, also have the potential to influence upgrading just as different forms of informal and private governance do (Khattak and Pinto 2018: 16). To better understand the essence of the three aforementioned features of GVCs, they will now be discussed one by one in a more detailed manner.

3.2. Governance within global value chains

To understand how a GVC is controlled and coordinated, one can conduct a governance analysis. Governance is defined as ‘’authority and power relationships that determine how financial, material and human resources are allocated and flow within a chain (Gereffi 1994: 97)’’. A governance

analysis thus shows how power imbalances between different actors in the chain shape the way a GVC is coordinated (Gereffi and Fernandez-Stark 2016: 10-11). By now, there exist various kinds of

governance types, which will be described in the following paragraph.

3.2.1. Different types of governance

At first, there were basically two types of governance distinguished. On the one hand, there were buyer-driven chains in which large retailers exerted considerable power over suppliers. By requiring suppliers to meet certain standards and protocols, big (mostly consumer-facing) brands determined the way the chain was operating (Gereffi 2001: 1618-1619; Gereffi and Fernandez Stark 2016: 10-11). On the other hand, there were producer-driven chains in which large, usually transnational manufactures played the leading role. Industries that are normally indicated as producer-driven are capital- and technology-intensive industries such as automobiles and aircraft (Gereffi 2001: 1618-1619).

The typology of governance has developed through the years, and has become much more elaborated. Instead of two, there are now five governance types that have been identified. Three variables together determine how a governance structure is measured and defined. These variables are: the complexity of the information shared between actors in the chain; the codification of information for production; and the level of supplier competence. The five governance types thus reflect on seller-buyer relational patterns and are called: market, modular, relational, captive and hierarchy (Gereffi and Fernandez-Stark 2016: 10-11; Stroehle 2016: 4). The three governance forms in the middle are all network forms of governance in which the lead firms exercises varying degrees of power through the coordination of suppliers. In doing so, they don’t have any direct ownership of the firms (Gereffi and Lee 2012: 25).

3.3. The influence of institutions

When conducting a GVC analysis, governance forms the centerpiece of study. It reveals how profits and risk are distributed within an industry by powerful firms, and thus revolves about private

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governance (idem: 25). By that, it has been seen as a distinct dimension from (local) institutional context, although this vision is slowly changing (Khattak and Pinto 2018: 16).

Looking at the local institutional context, the GVC framework shows how local, national and international conditions and policies shape the participation of a country in each stage of the value chain (Gereffi and Fernandez-Stark 2016: 14). The local institutional context differs from governance, since it is focusing on public regulation instead of private governance. However, academic literature has shown that there lies a potential for upgrading in the interaction between these two dimensions of the GVC (Jeppesen and Hansen 2004: 261-262; Khattak and Pinto 2018: 16; Sturgeon 2009). Mayer and Pickles (2014: 17) even have combined the two concepts and merged it into the following, new definition of governance:

‘’ Institutions that constrain or enable market actor behavior, both public in the form of governmental policies, rules, and regulations and private in the form of social norms, codes of conduct adopted by businesses, consumer demand for social responsibility or other non-governmental institutions and social movements’’.

Although there now exists a useful definition of governance that includes both private and public elements, there is still a need for more research to understand how different institutional forces together with private governance can influence environmental upgrading paths within GVCs (Khattak and Pinto 2018: 16).

3.4. Upgrading in GVCs

The last dimension that will be discussed stems from the local side of the GVC framework and is called upgrading. It can take place in many different forms, such as economic, social and

environmental upgrading, the latter being the most under-researched mode of upgrading (Khattak and Pinto 2018: 12). It will therefore be the subject of this study. Before defining the concept of

environmental upgrading and discussing strategies to drive this along the value chain, a more general explanation of upgrading will introduce this paragraph.

3.4.1. Moving up to higher value activities

The term upgrading refers to the different paths that GVC actors can follow to ‘move up the value chain’ and which are the result of both learning and innovation (Khattak et al. 2015: 319; Poulsen et al. 2016: 59). By moving up the value chain they capture more of the value that is created and they improve their positions in the global economy (Golini et al. 2018: 13). At the beginning, upgrading thus referred to economic upgrading, since it showed how actors tried to improve their products and processes within the GVC for economic gains (Poulsen et al. 2016: 59). Humphrey and Schmitz

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(2002) were the ones who then identified four types of economic upgrading. The first two are defined as process upgrading (firms reorganizing their production system or using improved technology) and product upgrading (firms improving the quality of a product). The other two are defined as functional upgrading (firms acquiring higher value-added functions in the same GVC) and chain or inter-sectoral upgrading (firms entering a new value chain) (idem: 1020).

If these upgrading strategies will be a success, depends on diverse mixes of government policies, institutions, corporate strategies, technologies, and worker skills (Gereffi and Fernandez-Stark 2016: 12). Yet, within GVC literature there has been a debate whether the success of upgrading really depends on economic gains, or maybe on other features that are more related to the social or environmental aspects of business activities. This debate among scholars has eventually led to the development of two new forms of upgrading, namely social and environmental upgrading (Khattak and Pinto 2018: 12; Poulsen et al. 2016: 59-60). Social upgrading refers to improvements in social conditions, such as fair remuneration and safe working conditions (Pyke and Lund-Thomsen 2016: 54). The concept of environmental upgrading will be explained in the next paragraph.

3.4.2. Environmental upgrading

More and more consumers have been realizing how big the environmental impact of production and transportation of goods actually is. Rising consumer awareness has led to many campaigns by civil society groups, and new regulation has been formulated on both the national and international level to limit the environmental impact of business activities. Companies are now forced to assess and address the impact that their activities along the entire value chain have on the environment, leading to the concept of environmental upgrading (Poulsen et al. 2016: 59). It can be defined as follows:

‘’The process by which economic actors move towards a production system that avoids or reduces the environmental damage from their products, processes or managerial systems (De Marchi et al. 2013: 65).’’

Environmental upgrading thus refers to behavioral changes by companies in order to create less environmental damage. The latter can be caused by, for instance, carbon emission, depletion of natural resources, energy consumption and after-use effects such as waste and pollution.

If environmental upgrading will also lead to net cost reductions depends on the specific case. In some cases, net cost reductions result from increased efficiency, reduced energy consumption and the potential for niche markets (Goger 2013: 75; Poulsen et al. 2016: 60). Nevertheless, and especially in the short term, environmental upgrading can also lead to net costs by, for example, buyers that are charging higher prices which leads to smaller margins (ibid.). However, the relationship between

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environmental upgrading and financial outcomes has not been studied thoroughly (Khattak and Pinto 2018: 11). Yet, there has been done a study by De Marchi et al. (2013) which outlines multiple strategies for environmental upgrading that at the same improve a firm’s competitive position.

De Marchi et al. (2013) combine the economic upgrading strategies that were mentioned before in this chapter with Orsato’s (2006) strategies that companies can use to make their business activities greener. For instance, if a company wishes to upgrade its production process, it can choose to

completely redesign its internal process while taking into account new environmental standards (which De Marchi et al. define as ‘Eco-efficiency’) or it can differentiate itself from other companies by improving the efficiency of its current process design with the aim to lower its costs and its environmental impact (which is defined as beyond compliance leadership). Another option for companies would be to get involved in green product upgrading. In this case, it can either choose to distinguish itself from its competitors by offering eco-friendly products and services for a premium prize (‘Eco-branding’) or it can choose to completely revisit its products or service to reduce its environmental impact while also competing on lower process (‘Environmental cost leadership’). Lastly, De Marchi et al. (2013) also combine functional upgrading with beyond compliance leadership and they combine intersectoral upgrading with environmental cost leadership. In the first case,

companies will develop new functions in the value chain that serve to reduce its environmental footprint and which leads to a competitive advantage based on a better corporate image. In the latter case, the green strategy that has been adopted by a firm also affects those industries in which the firm is competing.

The environmental upgrading strategies that were defined by De Marchi et al. (2013) are thus strategies that actors can use to upgrade their own activities. However, the aim of this study is to find out how actors in the value chain can stimulate other actors to use these environmental upgrading strategies and thus to become more sustainable. Nonetheless, to give a clear picture of what

environmental upgrading entails, the above explanation was given. Building on this information, the following paragraph will now elaborate on another set of strategies, namely the ones that actors can use to force, or at least stimulate, others parts of the GVC to get involved with environmental upgrading. These strategies will be used to structure the empirical part of this research.

3.4.2.1. How to drive environmental upgrading

3.4.2.1.A The prominence of regulation and how to comply with it

Within literature, most attention is given to regulation as a means to drive environmental upgrading, since it is typically seen as a suited tool to address social and environmental concerns in value chains (Kaplinsky and Morris 2017: vi). In this thesis, regulation will be categorized as an enforcing strategy,

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since regulation is meant to force other actors to start to upgrade their activities in an environmental friendly way. However, even though it has a legally binding element in it, this does not guarantee that every actor will comply with it (Achabou et al. 2017; Khattak et al. 2015: 328; Raustiala 2000: 399-408) . Subsequently, many scholars research what factors determine the level of compliance with this kind of enforcing strategies. This already started within the studies of International Relations, where research focused on the amount of assistance that was provided to states to comply with international regulation. On the one hand, academics distinguished a rationalist approach in which regulation is imposed on states without providing assistance to comply with it. On the other hand, the managerialist approach recognizes that states can be willing to comply, but that they sometimes simply lack the administrative or financial capacity to do so. Managerialists therefore believe that it would be fruitful to assist a deviant state. Strategies to assist them can be the provision of information, technical and financial assistance, or interpretive dialogue which is aimed at solving disputes. All these strategies are nonconfrontational, forward-looking and cooperative in nature and are aimed at coming into

compliance. In this thesis, they will be defined as supportive strategies, because they are used to offer support to comply with regulation.

The study of the relationship between regulation (enforcing strategies) and assistance (supportive strategies) started at the state-level, and was then also conducted at the firm-level. The following paragraph will focus on this firm level by explaining why lead firms in the value chain use regulation, and it will conclude by laying out a framework that explains how firms can drive upgrading in GVCs. This framework will then be used to structure the succeeding chapters that analyze the strategies that the PoR is using to spur environmental upgrading in the shipping sector.

3.4.2.1.B Strategies to drive environmental upgrading in GVCs

As mentioned before, many companies use private regulations to cope with social and environmental issues in value chains. (Kaplinsky and Morris 2017: vi-vii). They are often imposed by lead firms in the value chain on their suppliers. By doing this, they generally seek to respond to Triple Bottom Line (TBL) imperatives (idem: 3). As the name already suggests, the TBL focuses on three kinds of bottom lines that are relevant for a firm. Firstly, there is the economic bottom line, and then the social and environmental bottom line will follow. The economic bottom line is focused on the profit that a corporation has to make, the other two determine its social license to operate in final markets. For instance, if a company experiences reputational damage arising from the social or environmental damage that its products and processes cause, customers won’t buy these anymore (ibid.).

Looking from a GVC perspective, it’s not only the international operations of a firm itself that need to meet the TBL. The achievement of the TBL is only credible if the operations throughout the entire supply chain also meet social and environmental standards (Kaplinsky and Morris 2017: 8). If they

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don’t, there is still a risk that a firm will lose its social license to operate. Nonetheless, the question arises how firms are going to ensure that other companies in the value chain are going to meet the TBL, since there exists a demonstrable gap between strategy (meeting social and environmental standards along the entire value chain) and the capacity to achieve this (Kaplinsky and Morris 2017: 8, 25-26; Tewari and Pillai 2005: 4-5). In 2004, Jeppesen and Hansen (2004) already distinguished different tools that companies can use to drive environmental upgrading by other companies. They range from shallow environmental collaboration with little transfer of resources (such as standard setting and monitoring + control) to deep environmental collaboration (technical assistance).

During the years, academics have built on this classification of tools by Jeppesen and Hansen (2004) to drive environmental upgrading, which eventually led to the development of a refined framework that lays out three different set of responses to get the supply chain along with the TBL (Kaplinsky and Morris 2017: 8). Each of these approaches starts with the implementation of regulation (enforcing strategy), and sometimes this is complemented by assistance to comply with this specific regulation (supportive strategy). The three approaches that were identified by Kaplinsky and Morris (2017) and that will be used as a guide for this thesis are:

Sink or swim in the supply chain: this response is known as the most passive approach. In this case, lead firms impose regulation on their suppliers without further assistance. They simply monitor whether suppliers are performing in accordance with their rules, and if not, they sanction them. Sanctions can take place in the form of payment of lower prices, or lead firms can completely exclude suppliers from their value chain. In other words, suppliers are left to sink or swim. This passive approach is mainly used by firms that are new in their use of GVCs or because they are no consumer-facing brands because they produce capital or intermediate goods (Kaplinsky and Morris 2017: 8). It is comparable to the rationalist view on state compliance with international regulation that was earlier discussed.

Supply chain management by the lead firm: in some cases, the lead firm cannot take the risk to adopt a sink or swim approach to supplier performance. If final product quality or consumer safety are

important, suppliers have to achieve certain quality standards. Otherwise, there is a great chance that the lead firm will face consumer backlash which will make it more vulnerable to civil society pressure. Given this situation, it is likely that a lead firm will engage in supply chain management programs. These are meant to help suppliers in attaining the required social and environmental standards. Apart from monitoring and sanctioning, these programs emphasize clear communication on the content of new regulation, suited methods to comply with them and on benchmarks that show to a supplier how it is relatively performing. When a supplier isn’t capable to meet regulation, the lead firm will team up with the supplier to assist in analyzing problems and improving performance. This can, for instance,

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be done by technology transfer and technical assistance to lower the costs of compliance or by

providing funding (Kaplinsky and Morris 2017: 8-9; Tewari and Pillai 2005: 16, 22, 29-30). Due to its focus on the assistance of nonconformist actors, this strategy is similar to the managerial approach on state compliance.

Using intermediaries: in the period between 1970 and 1990 more and more companies started to issue their own regulation because they noticed how important social and environmental standards were to improve their competitive performance. However, the more companies developed their own

regulation, the more supply chain management programs were necessary. This eventually distracted corporations from their core competences, because supply chain management programs were taking too much time and resources. Moreover, big firms often lacked the required knowledge and

competences to help their suppliers, especially the small and/ or marginalized ones. Therefore, lead firms encouraged or forced their suppliers to get assistance from specialized intermediaries which could help them to comply with new social and environmental regulation. (Kaplinsky and Morris 2017: 9).

APPROACH ENFORCING STRATEGY SUPPORTIVE STRATEGY

Figure 3. Approaches to drive environmental upgrading (information in figure is based on Kaplinsky and Morris 2017)

A problem that was identified in the literature, is the fact that most companies use the first approach (sink or swim in the supply chain), meaning that they don’t provide any assistance to comply with regulation (Achabou et al. 2017: 226; Jeppesen and Hansen 2004). This is a problem because a lack of technical knowledge and financial constraints are still the most common causes for firms not being able to start upgrading their activities in an environmental friendly way. This is especially the case

Regulation Regulation Regulation Assistance by lead firm itself Assistance by intermediary Sink or swim in the

supply chain

Supply chain management

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when lead firms (western companies) impose regulation on developing countries (Khattak et al. 2015). It is not surprising then, that there also exists a lively debate about ‘who pays’ for environmental upgrading (Goger 2013: 73-81; Khattak and Pinto 2018: 14-15).

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4. Methodology

4.1. Research approach

Within social sciences, there exist basically two broad approaches that can be used to conduct a research (Hancké 2010: 110). The first one is called deductive and uses theory as a starting point. In this case, a researcher uses his or her data to test whether the empirical findings are compatible with existing assumptions, theories or hypotheses (Thomas 2006: 238). The other, contrasting approach is called inductive and works exactly the other way around. It is described as follows: ‘’The researcher begins with an area of study and allows the theory to emerge from the data (ibid.)’’. So starting of with raw data, the researcher tries to develop new concepts, themes or a model by interpreting the empirical findings (Halperin and Heath 2012: 29).

This study will use an inductive qualitative approach. This approach corresponds to the purpose of this thesis to gain a better understanding of the strategic attempts through which ports try to stimulate environmental upgrading in the shipping sector. Since there currently exists little knowledge about what ports are doing to make maritime shipping greener, and why they have chosen for specific strategies, this study is obviously more explorative in nature. Therefore, this research leaves room for unexpected explanations and outcomes, and will provide an in-depth insight into the process of driving environmental upgrading in the shipping sector.

4.2. Research design

This study adopts a single, qualitative case study design in order to analyze strategies to improve environmental upgrading. A case study design is especially useful if one wants to answer ‘how’ and ‘why’ questions, doesn’t have the possibility to manipulate the behavior of those involved in the study, and wants to cover contextual conditions (Baxter and Jack: 2008). Since this is mostly the case for the earlier mentioned research question, a qualitative case study is the proper research design.

Single case study analyses focuses on one single case (N=1) that is expected to provide an insight into causal paths and mechanisms that can also be helpful to understand other, similarly structured cases (Hancké 2009: 68; Halperin and Heath 2012: 172). In comparison with multiple or comparative case study design, a single case study approach is better equipped to include historical and contextual factors that can also have an impact on the outcome (Halperin and Heath 2012: 172). It therefore allows a researcher to better understand the complexity of a phenomenon, also because it gives a researcher more time to collect data on a specific case than a multiple case study design does (ibid.). Accordingly, it is more likely to give new, valuable insights into the role of ports with regard to environmental upgrading in maritime shipping.

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4.3. Elements of study and case selection

The concept of a ‘port’ forms the unit of analysis in this research project. Consequently, the universe of cases would be all ports that exist in this world. Within this thesis, the PoR has been chosen as the case study. The reasons behind this choice, will be outlined below.

Firstly, studying the shipping sector is interesting because it is conceived as a sector that is lagging behind others in the process of environmental upgrading. This is surprising since more than ninety per cent of world trade is carried over sea and the environmental impact of the sector is considerable. For instance, between 2007 and 2012, international shipping accounted for approximately 2.8 per cent of global CO2 emissions (Poulsen et al. 2016: 57-58). If the sector isn’t going to change anything, it is expected that its emissions will increase between 50 and 250 per cent by 2050 (Port of Rotterdam 2018: 7). Besides, other key environmental issues such as oil spills, noise and the dumping of waste material are also highly related to maritime shipping (Lister et al. 2015: 185). There is obviously a need to lower the environmental impact of this sector, but this will not be achieved easily. Since the highly transnational nature of maritime shipping, the sector is hard to regulate at the international level. Moreover, there are multiple shipping segments present (container, bulk and transport) that all work quite differently. Taking the complex nature of maritime shipping and the uncertain regulatory context into account, it is important to understand its dynamics and the relation between this sector and other supply chain actors in order to foster its sustainability.

This thesis is specifically focusing on the role of ports since they are indispensable nodes of supply chains (Denktas-Sakar and Karatas-Cetin 2012: 301). Many strategic stakeholders and activities in the value chain are brought together in ports, including shipping companies. By this, ports are becoming network actors that have a strategic and directing role in GVCs (Denktas-Sakar and Karatas-Cetin 2012: 301, 313; Interview 2; Interview 5). It is therefore interesting to see how far their influence reaches with regard to greening the shipping sector. Furthermore, there is a need for more research on the role of ports on enhancing the sustainability of maritime shipping, so the interests of port

operations and shipping companies can be brought together (Afshin Mansouri et al. 2015: 16).

The case of the PoR was selected on the basis of its size and on the basis of its importance in the field of sustainability. Regarding its size, it should be noticed that the PoR is the biggest sea port in Europe (www.economist.com). In addition, it also covers a spot in the Top 20 World ports (Port of Rotterdam 2015). In 2018, 29.476 seagoing vessels and 123.859 inland vessels arrived in the PoR (Port of Rotterdam 2018: 9). With a turnover of approximately €710 million and 385.000 jobs, the Port is of great value for the Dutch society (Port of Rotterdam 2019: 1). Research indicated that the PoR contributes €45.6 billion to gross domestic product (Port of Rotterdam 2019). In addition, the Port Authority is constantly improving the port’s competitive position as a logistics hub and world-class

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industrial complex. In doing so, it is not only focusing on its size, but it is also distinguishing itself with regard to quality. It is therefore leading the (sustainable) energy transition, and is now also committed to digitalization with the aim to make the port, and the rest of the value chain, more efficient (ibid.). The CSR statement of the port also shows its ambitions to be a frontrunner, arguing that it wants to serve as an example and inspire others in the field of the following three themes: Safe & Healthy Environment, Climate & Energy and People & Work (www.portofrotterdam.com).

Considering the fact that the PoR wants to be a frontrunner in the area of sustainability, it is likely that this port is also involved in making other parts of the value chain, such as maritime shipping, more sustainable. Hence, the case could be seen as a most-likely case since it is expected that it will provide supporting evidence for this research (Levy 2008: 12). At the same time, it is also an extreme case because of its size and frontrunner position. This means that is has outstanding features compared to other ports (Seawright 2016: 502). As will be explained in more detail later on in this chapter, this does make it hard to generalize the findings of this study. The PoR and the strategies that it is undertaking are therefore meant to be an example for other ports, instead of representing them.

4.4. Data and method

The findings in this research are based on both primary and secondary data. The primary data consists of interviews and data extracted from documents such as policy reports and news reports. In the case of the PoR, its annual report and its website have been crucial sources. Especially their website has been very useful, since they publish many press releases on what initiatives they undertake. Secondary data has mainly been used for the analytical framework, but is has also helped to gain a complete overview with regard to the empirical data.

The analysis that has been done, is based on the method of process tracing. This method is often used in case studies to explore causal mechanisms (Halperin and Heath 2012: 89). It is especially suited for inductive research when the aim is to map out different causal paths to explain a certain outcome rather than testing an existing theory (Hancké 2010: 66-68). Specifically, this research tried to establish a clear chain of evidence linking cause (barriers to enhance environmental upgrading in maritime shipping) and effect (greening strategies of ports). The observation that has been made in this study if twofold. One the one hand, this thesis starts with a more descriptive examination of the strategies that the PoR is using to enhance the sustainability of the shipping sector. On the other hand, it proceeds with an analysis of the reasons why certain strategies have been chosen over others.

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4.4.1. Interviews

During this research, semi-structured interviews have been conducted to answer the first sub-question (What strategies do ports use to foster environmental upgrading in maritime shipping?) and the second sub-question (For what reasons have ports chosen their current strategies with regard to the greening of maritime shipping?). However, whereas the first sub-question could also easily be answered by using online data, the second sub-question could only partially be answered with other sources than interviews. The interviews have therefore been crucial to answer the second sub-question, and served more as a source for triangulation of the online results concerning the first sub-question.

Using semi-structured interviews, the interviews consisted of both structured questions (to obtain factual information) and unstructured questions (to probe deeper into people’s experiences). They were prepared by formulating a set of primary questions, and by formulating possible follow-up questions to explore aspects of the response to each question asked. However, in semi-structured interviews there is room to vary the sequence in which the questions are asked. The questions are also more general, so the respondents have the possibility to answer the questions in their own words and to give extra information if they think this is valuable (Halperin and Heath 2012: 258).

In total, 23 people were approached to participate in this research, eight of whom confirmed to contribute. The interviews were thus conducted with 8 stakeholders from four different organizations in April and May 2018 (see Appendix A). Some of them were conducted face-to-face in Rotterdam, others via telephone. Among the interviewees were five representatives from the PoR, one of the Expertise- en InnovatieCentrum Binnenvaart (EICB), one of SmartPort and one of NextLogic. The latter two were founded by the PoR itself, NextLogic now officialy standing on its own as a subsidiary company. All the interviews were held in Dutch, so the results had to be translated for the actual report.

4.4.2. Document analysis

4.4.2.1. Primary data

The document analysis is primarily based on publications and reports originating from the PoR. These documents were obtained through online search as well as through contact with interviewees.

Moreover, some of the people who didn’t agree to do an interview did send a number of useful

documents. Among them were the Annual Report of the PoR, White Papers on specific themes such as digitalization, and the report of a great research on decarbonizing supply chains which was carried out by the Wupertal Institut on request of the PoR. As mentioned before, the website of the Port has also been very valuable. The website is up-to-date and there are a lot of press releases online that relate to the actions that the port is undertaking to stimulate environmental upgrading in the shipping sector.

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The data that stems from the PoR itself is supplemented by an examination of publications and news articles produced by external parties such as organizations related to the Port and the shipping sector, NGOs, journalists and academic reports. By including external publications other relevant

perspectives and interests are also taken into account.

4.4.2.2. Secondary data

For this research, secondary data has mainly been used to develop the theoretical framework. Nonetheless, it also had an important role with regard to the empirical data, since the academic literature offered support for the findings of this study. By reading and using this literature, it was made sure that this study is not unnecessarily reinventing the wheel.

4.5. Operationalization

To be able to conduct this research it is important to define the central concepts and variables used in this study. The subject of this study is the concept of environmental upgrading, since it focuses on which strategies can be used to drive environmental upgrading in the shipping sector. In the analytical framework the definition of environmental upgrading was described as follows:

‘’The process by which economic actors move towards a production system that avoids or reduces the environmental damage from their products, processes or managerial systems (De Marchi et al. 2013: 65).’’

Behavioral changes that thus lead to more sustainable practices, such as changing to biofuels or reducing the amount of noise a ship is making, are conceived as environmental upgrading.

The strategies that the PoR uses to drive environmental upgrading form the dependent variable of this study since there exist multiple contextual factors, referred to as ‘barriers’, that influence the nature of these strategies. Subsequently, these barriers form the independent variable. In the case of the

dependent variable, port strategies to foster environmental upgrading in maritime shipping, it is important to define what is exactly meant by strategies. Strategies are in this matter conceived as an overarching plan of action to achieve a long-term overall aim. A strategy is thus a set of actions that have the same characteristics and that are meant to serve the same goal.

Lastly, it is decisive to define what the shipping sector exactly entails since it is the main focus of this study. In this thesis, the shipping sector includes both ocean-going and inland shipping vessels. It, however, does not include the business operations of the port itself and it also doesn’t include the activities that are related to the port and industrial complex in Rotterdam.

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4.6. Measurement concerns

Practical considerations such as time have resulted in certain limitations. For instance, since lobbying at the IMO is an important tool of the Port to stimulate green regulation, it would have been valuable to speak to someone who is representing the PoR at the International Association of Ports and Harbors (IAPH) in the IMO to find out how this lobbying process actually works. What also could have been useful is speaking to representatives from the shipping sector to see how they view the relationship between the Port and the sector, with the aim to find out how influential the Port actually is in the value chain. This might have given a more comprehensive image of the (strategic) position of the Port in the value chain, and by that the limitations it faces in the area of greening maritime shipping. Lastly, another limitation is related to the amount of information that is available, and the amount of

information that has been used in this research. The PoR is initiating a lot of projects, and is participating in a lot of collaborations, that focus on making the shipping sector more sustainable, some bigger than others. Since there exists a limitation on the size of this thesis, it was not possible to include every action of the Port. Time again played a role in this matter. However, all the different initiatives have been categorized into different strategies. These categories are based on the analysis of the observations by the researcher, and were also checked during the interviews. In this way, the study covers the overarching strategies, only doesn’t describe each initiative or collaboration that falls under these strategies. By explaining each strategy with a few examples, there hopefully exists a clear image of what each strategy exactly entails. Nevertheless, considering the size of the organization of the PoR and the many information that is available (online), there still exists a risk that this study has

overlooked a certain strategy.

Apart from the above limitations that are specific to this study, there also exist general limitations that are related to the research approach, design and method. As Hancké (2009: 91-92) argues: ‘’qualitative data does not exist without your interpretation, since you are the one that is systematizing, ordering and reporting it’’. The limitations of this study are related to the validity, reliability, replicability and generalizability of the study, and will be explained in the following paragraphs.

4.6.1. Validity

When a research is valid, your measurements correctly capture the concepts that you are working with (Hancké 2009: 86-87). More specific, the internal validity of a study looks at the extent to which it is possible to infer that a causal relationship exists between two or more variables (Mariotto et al. 2014: 59). Within a qualitative case study, there exists a risk with the internal validity, because the collected data is vulnerable to the interpretation of the researcher. This study is conducted by only one

researcher, so there exists a great chance that others would interpret the data differently which could, in turn, lead to slightly different conclusions. Moreover, a considerable part of the results presented in this study is based on data gathered through semi-structured interviews. In this matter, there exists a

Sustainable shipping : port strategies to drive environmental upgrading in the shipping sector