The major challenge facing port authorities in emerging economies
In developing countries, Port Authorities (PAs) face a dual challenge: ensuring the competitiveness of their ports in an increasingly sophisticated sector affected by multiple disruptions, whilst operating under institutional, financial and operational constraints. Traditionally, most port authorities adopt the landlord model, in which the public sector retains ownership and regulatory control, whilst the private sector carries out port operations through long-term concessions. However, this model, which has characterised the modernisation of the sector in recent decades, no longer fully meets current needs.
As the global economy becomes increasingly integrated and logistics chains grow more complex, the various stakeholders are demanding that Port Authorities evolve in their role, moving from being mere managers of port infrastructure to organisations responsible for fostering innovation, the development of new businesses beyond the port area, sustainability, logistical integration with the wider region, support in energy and defence matters, digitalisation and the management of data for the port community, amongst other aspects.
The practical implication is clear. Port authorities that remain confined to the narrow script of the landlord model run the risk of becoming strategically incomplete institutions in an era in which competitiveness depends on the ability to structure and orchestrate systems, and not simply to manage assets.
These are not trivial functions. In one of the chapters of my PhD thesis, I analysed precisely the degree of attention paid to these activities by port authorities in emerging countries. The level of adoption of practices in these areas was low. It is important to note that there has been an evolution in recent years, particularly in terms of interest, commitment and attempts to reorient the approach towards a model that some researchers refer to as the ‘advanced landlord’. However, in terms of concrete results, little has changed.
The institutional context: dependence, autonomy and constraints
The performance of a port authority is heavily influenced by its institutional context. In developed countries, corporatised structures, with greater financial and strategic autonomy, enable a more dynamic and results-oriented approach.
In contrast, in developing countries, close ties to the government and boards of directors with significant political influence often end up limiting decision-making freedom and shifting the focus away from ‘micro-level’ objectives—such as operational efficiency, profitability and innovation—towards ‘macro-level’ goals, which are more vague and difficult to measure.
This imbalance between autonomy and dependence creates what might be called an ‘institutional trap’, in which the port authority operates with low levels of professionalisation, a lack of clear goals and falls short of the strategic maturity required to move towards new functions demanded by the market.
Is there such a thing as an ideal model?
The port authorities of the world’s most efficient and innovative ports balance two key objectives:
- To drive regional and national economic development;
- To generate sufficient revenue to invest and ensure their long-term sustainability.
These objectives coexist under a ‘shared value’ approach, in which the port authority acts simultaneously as a promoter of the region’s social and economic development (a public dimension), and as a business organisation seeking new sources of revenue to ensure the long-term sustainability and competitiveness of its cluster (a more private dimension).
To achieve this strategic maturity, the Port Authority must expand the functional, geographical and vertical scope of its activities, moving beyond its traditional role as a land and concession administrator to become a key player in creating initiatives to attract and generate value for its port community in this new context.
Beyond the landlord: the new dimensions of strategic expansion
The evolution of the landlord model does not merely entail greater efficiency in the management of concessions, but also the expansion of the port authority’s strategic role as an orchestrator of the logistics, industrial and energy ecosystem. This transformation can be understood through four complementary areas of action:
1 – Institutional and regulatory foundations
These correspond to the traditional and structural functions of the port authority:
- Strategic planning and spatial planning
- Regulation, supervision and governance of operators
- Development and maintenance of shared infrastructure
- Safety, security and operational continuity
- Environmental management and sustainability
2 – Territorial integration and logistics
Broadening the focus beyond the port perimeter by:
- Improving and increasing connections with the hinterland
- Developing logistics support zones
- Investing in inland terminals
3- Competitiveness, data and energy
Positioning the port as a platform for efficiency and value creation through:
- Promoting competitiveness and attracting cargo
- Data governance and management of port logistics information
- Integrated quality management across the port community’s processes
- Developing the port as an energy hub
4- Brand, innovation and international reach
Reflecting the port authority’s entrepreneurial and catalytic role:
- Brand building
- Supporting the development of innovation ecosystems
- Internationalisation and knowledge transfer
These factors point to a structural shift: whilst the port authority’s direct role in operations has diminished—with the focus now on concession management and oversight—its strategic, entrepreneurial and coordinating role within the logistics community has grown significantly.
It is at this point that the port ceases to be merely a ‘maritime interface’ and establishes itself as an integrated ecosystem of business, innovation and the generation of regional value.
The path to transition
For developing countries, corporatisation is emerging as an important institutional step towards modernising port authorities and enhancing their capacity for strategic action. This process involves transforming the Port Authority into an entity characterised by a business-oriented approach, modern governance, greater financial and managerial autonomy, and a focus on results and value creation.
However, in many emerging countries, corporatisation has been implemented only partially or to a limited extent, maintaining high levels of political dependence, bureaucratic constraints and limited capacity for investment and decision-making. As a result, several port authorities continue to operate with hybrid structures that hinder their ability to lead processes of innovation, energy transition and coordination of the logistics-port ecosystem.
Port authorities that implement corporatisation processes effectively and consistently tend to achieve significant benefits, including:
- Attracting external capital and private partners more efficiently;
- Reinvesting surpluses in logistics, energy and technology projects aligned with the new requirements of the market;
- Expanding their operations into the hinterland, connecting inland terminals and multimodal hubs;
- Exporting expertise and participating in international port projects.
This model creates the ideal environment for port entrepreneurship to flourish, with the port acting as an investor, an incubator for innovation and an active agent in the economic and social development of its region.
The transition towards a more autonomous model does not mean abandoning public responsibilities. On the contrary, good governance of port authorities requires a balance between autonomy and accountability.
PAs that are overly business-oriented may lose focus on functions of public interest—such as regulation and port-city relations—whilst those excessively controlled by the state remain rigid and lacking in dynamism.
The middle ground appears to be the most promising: institutions geared towards developing a business platform and a logistics-port ecosystem, guided by public interests, but combining business efficiency, long-term vision, transparency and social commitment.
In developing countries, the challenge lies in navigating this transition in a structured manner: first, by increasing autonomy and strengthening governance rules, alongside the professionalisation of management; and, at the same time, by advancing the implementation of a strategy focused on ecosystem leadership, as well as the development of new sources of value and revenue generation for the entire port community.