Abstract
This study was on port concession and the quality of service delivery in Nigerian ports, with Apapa and Rivers ports as the focus. The survey research design was used. The respondents of this study consisted of customers who do business in the ports. The population of the study was one thousand, five hundred and forty seven (1,547) and sample size of four hundred (400) was selected using stratified sampling technique. Data were collected using a set of structured questionnaire. Data generated were analyzed using descriptive and inferential statistics, specifically with arithmetic mean, multiple and simple regression analysis with the aid of E-view statistical package. Findings revealed that private ownership had positive and significant effect on service delivery, tangible and tangible and super-infrastructure, ship turn-around time among others. Hence, we concluded that port concession positively and significantly affected the quality of service delivery in Nigerian Ports. Based on these findings, we recommend among others that port operators should as a matter of urgency restructure their operational activities to reflect their mandate of concession; Port operators should from time to restructure their operational sequence so as to further reduce the ship turn-around time; the port operators should adopt full utilization of Management Information System (Technological application); the port operators should endeavour to revise and simplify their operational operando so as to ensure that it captures and responds to customers’ values and aspirations on regular bases.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of contents vi
Abstract x
CHAPTER 1
INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the problem 3
1.3 Objective of the study 6
1.4 Research questions 6
1.5 Research hypotheses 7
1.6 Scope of the study 7
1.7 Significance of the study 8
1.8 Operational Definition of Terms 8
CHAPTER 2
REVIEW OF RELATED LITERATURE
2.1 Conceptual framework 10
2.1.1 The Concept of Port Concession 11
2.1.1.2 Commercialization 20
2.1.2 Role of Nigeria Port Authority 22
2.1.3 Functions of a Ports System 23
2.1.5 Structure of Port Reforms 25
2.1.6 Objectives of Port Reforms and Concession Programmes 26
2.1.7 Timeline of the Port Reforms in Nigeria 27
2.1.8 Prospects and Problems of the Nigeria Port Concession 28
2.1.9 Benefits of NPA Concession 28
2.1.10 Comparative Analysis of Nigerian Port during Pre and Post Concession
Eras 29
2.2 Operational Performance Indicators 30
2.2.1 Operational Dependency 30
2.2.1.2 Ship Turn-around Time 32
2.2.1.3 Technological Application in the Transportation Industry 33
2.2.2 Service Quality 38
2.2.3 Service Quality Dimension 42
2.2.4 Service Quality and Customer Satisfaction 41
2.2.5 Servqual or Gap Model 45
2.2.6 Empathy 47
2.3 Theoretical Framework 55
2.3.2 Service Quality Model 55
2.3.3 Transaction Cost Theory 58
2.3.4 The Commitment-Trust Theory 59
2.3.5 Service Guarantee Theory 61
2.4 Empirical Review 62
2.5 Summary of and Gap in Literature 68
2.6 Operationalized Conceptual Framework 69
2.6.1 Historical Background of Port Development in Nigeria 69
2.6.2 Adoption of Landlord Port Model by Nigeria 73
CHAPTER 3
RESEARCH METHODOLOGY
3.1 Research Design 75
3.2 Study Area 75
3.3 Population of the Study 76
3.4 Sample Size and Sample Technique 75
3.5 Instrument for Data Collection 77
3.6 Sources of Data 78
3.7 Validity and Reliability of Instrument 78
3.7.1 Reliability of the Instrument 78
3.7.2 Validity of the Instrument 79
3.8 Method of Data Analysis 79
3.8.1 Model Specifications 79
3.9. Testing of Hypotheses 81
CHAPTER 4
DATA ANALYSIS AND DISCUSSION OF RESULTS
4.1 Collation of Data 82
4.1.2 Analysis of Responses from the Customers 83
4.2 Data Presentation 85
4.2.1.1 Analysis of Question 1(Private Ownership) 85
4.2.2.2 Analysis of Question 2 (Operational Dependency) 86
4.2.2.3 Analysis of Question 3 (Technological Application) 86
4.2.2.4 Analysis of Question 4 (Tangible/Super Infrastructure) 87
4.2.2.5 Analysis of Question 5 (Ship turn-around time) 87
4.2.2.6 Analysis of Question 6 (Responsiveness) 88
4.2.2.7 Analysis of Question 7 (Service delivery quality) 88
4.3.1 Descriptive Analysis of Port users Responses 89
4.3.2Regression Analysis of Variables 84
4.3.3 Analysis of Objective 1 93
4.3.4 Analysis of Objective 2 95
4.3.5 Analysis of Objective 3 96
4.3.6Analysis of Objective 4 98
4.3.7 Analysis of objective 5 100
4.5. Test of hypotheses 101
4.5.2.1 Hypothesis 1 101
4.5.2.2 Hypothesis 2 103
4.5.2.3 Hypothesis 3 104
4.5.2.4 Hypothesis 4 106
4.5.2.5 Hypothesis 5 108
4.6 Discussion of results 109
CHAPTER 5
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of findings 112
5.2 Conclusion 113
5.3 Recommendations 114
5.4 Contribution to knowledge (Heuristic Model) 115
5.3.1 Limitation and Suggestion for further studies 115
REFERENCES 117
Appendices
1. Questionnaires to the Port users 129
2. E-view data analysis output 132
CHAPTER I
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
A port is a location on a coast or shore containing one or more harbours where ships can dock and transfer people or cargo to or from land (Eniola, Njoku, Oluwatosin and Okoko, 2014). Port locations are selected to optimize access to land and navigable water, for commercial demand, and for shelter from wind and waves. The use of the sea as a means of transport in Nigeria dates back to the 15th century (1485) when the Portuguese sailed into Lagos with their vessels basically to trade on artifacts in Benin City. From the pre-independence era till date, the nation’s maritime industry is characterized by the domination of foreign vessels and/or carriers from the developed market economies of Western Europe and America. In order to control this scenario, subsequent developments led to the opening of ports at Apapa and Port Harcourt, as well as the creation of the Nigerian Ports Authority (NPA) by the provision of Ports Act 1954 to load and discharge as well as maintain and develop the ports (Njoku, 2009).
From the commencement of operation of the NPA in 1956, Nigeria had operated a full capacity service port model. This was fraught with lot of challenges which informed the idea of switching over to a landlord port model or port concession. The port concession use British version was completed in 2006 after an international competitive bidding process. This led to the emergence of 26 terminals which were concessioned to private terminal operators on the Build, Operate and Transfer (BOT) model (Eniola, et al., 2014).
The reform brought about ceding of cargo handling operations at the port to private terminal operators, leaving NPA as the facility owner. The Nigerian ports witnessed a rapid transformation as a result of this reform in which Nigerian ports were concessioned to the port operators called concessionaires.
Before the advent of port concession (1956-2005), the Nigerian port system suffered from numerous ills which included the following: the turnaround time for ships was too long and usually calculated in weeks, sometimes months, depending on the cargo being loaded or discharged; cargo-handling plants and equipment owned by the NPA were few and mostly unserviceable leading to shipping companies hiring these machines from private sector sources after having paid NPA; dwell time for goods in ports was prolonged due to poor port management and as a such overtime cargo filled the most active seaports leading to port congestion; labour for ship work was held in the vice-grip of wharf overlords who controlled dockworker unions and supplied less than the manpower paid for. This fraud, which became accepted by the maritime community lasted for years and was usually perpetrated to extract maximum revenue from helpless ship owners and their agents without minding how this impacted on the Nigerian economy and the already dented image of the Nigerian seaports. As a result of the compounded problems, the Nigerian seaports were rated as one of the costliest seaports in the world. Consequently, it adversely affected the patronage of the seaports (Njoku, 2009).
Marketing logistics is an essential part of international trade due to the high volume of trade and sensitive nature of the goods. The port system remains the entry and exit point of all goods in international business. Majority of these port systems are situated at the nations coastal lines. Every nation with a coastal line has an authority or agency responsible for the clearing and forwarding of vessels that come to its coastal borders. This agency in Nigeria is known as Nigeria Port Authority (NPA). According to Igbokwe (2010) Nigeria Port Authority is a
Federal Government Agency that provides for the transfer of cargoes from one vessel to another or from one mode of transportation to another. NPA acts as a centralized planning board, quasi-public goods warehouse and attempts to control competition in a way that it may not be destructive to users. According to Mohamed (2008), NPA is simply the management and business entity of the seaport owned by the Nigerian government. This port is part of government public sector which helps to provide a better water transportation management in Nigeria especially at the seaports and freight management. These ports have experienced many transformation that were targeted at improving the nature and face of service delivery in Nigeria. Government services in Nigeria have witnessed transformations in several aspects of service delivery due to the changes in government policies and the privatization and commercialization policies (Nwachukwu, 2014).
1.2 Statement of the Problem
The globalization of the world economy has increased the importance of the role for transportation. In the transportation arena, the sea port plays a key role in the process because of the utilization of economy of scale advantages, as compared to other traditional methods of transportation. Port technology had to change at a faster rate commensurate with the pace of technological changes in shipping, for instance from handling of bulk palletized cargo to containerization. Ships and ports have never so technically advanced, never been so sophisticated, never been more immense, never carried/contained so much cargo, never been safer and never been as environmentally friendly as they are today (Eniola, et al., 2014). In order to support the global and regional trade development, Nigerian ports have increasingly been under pressure to improve on efficiency and productivity by ensuring that port services are provided on an internationally acceptable standard.
Recognizing the importance of adequate port facilities and efficient shipping service in facilitating domestic and international trade in Nigeria, the port reform has focused on:
i) rehabilitation, expanding and improving existing port facilities.
ii) developing new port if need be to stimulate regional socioeconomic development.
iii) acquiring a wide range of cargo handling equipment and port facilities including infrastructure and superstructure.
iv) institutional strengthening and capacity building.
In addition, the port reform seeks to rehabilitate and improve the inland waterways, landing stages, navigational aids and ship building and repair facilities. The performance of a port can be evaluated by observing both its utilization and the speed and reliability of movement of cargo; and services through the port. While there are number of activities involved from entry to departure of a cargo into/out of the port, it is important to measure the performance of the ports or the total movement of cargo. These include the through put of the port, ship traffic, berth, ship turnaround time etc. Efforts to improve performance will require identifying activities that introduce excessive costs or time on operations.
The pertinent question is to ask if the port reforms have succeeded in easing the bottlenecks to the port development thereby attracting more cargo to Nigeria ports, reduce congestion and generally enhance the productivity and efficiency in port operation. So far, how has the port reform fared, judging from the annual throughput/quantity of cargo that has passed through the ports since the inception of the reform programme? An answer to this question will also give a clue to the level of efficiency in the operations in the ports regarding ship traffic berth, ship turn round time and so on.
The pre and post concession impact factors of ports have been evaluated by many authors. These authorities have evaluated and compared the quantitative benefits of the port reform Olaogbebikan, Ikpechukwu, Akin, and Enosko, (2014); Nwanosike, Tipi, and Warnock-Smith, (2012) and NPA report (2011) without reviewing the qualitative experience of port users in Nigeria. Challenges and gaps exist in the area of determining the extent to which these public service deliveries have been improved upon since they are jointly rendered by port owners and private operators. The problem is to ascertain if the port reforms through concession have impacted on the service delivery in terms of reliability and assurance that it can take care of users’ phobia of berthing their cargoes/vessels in the ports of Nigeria coastal lines.
There has been scanty research on the effect of port concession on the service delivery of Nigeria port system since the reform took place in 2006. This constitutes a gap in knowledge that this study set out to fill.
More so, empirical studies on port concession and service delivery quality in Nigerian coastal lines are scanty or fragmented. Therefore, it is against this background that we attempt to investigate the effect of port concession on the quality of service delivery in Nigerian ports.
1.3 Objectives of the Study
The main objective of the study is to determine how the concessions of Nigeria Ports have affected the quality of service delivery in Nigeria. The specific objectives of the study are to:
i. ascertain the effect of private ownership on the tangibles and super infrastructure of Nigeria ports.
ii. ascertain the effect of private ownership on ship turn-around time in Nigeria ports.
iii. determine the effect of technological application of ports operations on the level of responsiveness in Nigeria ports.
iv. determine the effect of Operational dependency on service delivery at the ports.
v. establish the joint effect of private ownership, technological application and operational dependency on the quality of service delivery in Nigeria ports.
1.4 Research Questions
The research questions that guide the study are stated below:
i. what is the effect of private ownership on the level of tangibles and super infrastructure in the Nigeria port service delivery?
ii. how does private ownership of ports affect ship turn-around time in Nigeria ports?
iii. how does technological application of ports operations affect the level of responsiveness in Nigeria ports?
iv. in what way(s) is operational dependency affect quality of port service delivery?
v. what is the joint effect of private ownership, technological application and operational dependency on the quality of ports services?
1.5 Hypotheses of the Study
The following hypotheses were formulated to guide the study;
Ho1: Private ownership does not significantly affect the tangibles and super infrastructure of Port Service delivery in Nigeria.
Ho2: Private ownership does not significantly affect the ship turn-around time in Nigeria ports.
Ho3: Technological application does not significantly affect the level of responsiveness of service delivery in Nigeria port.
Ho4: Operational dependency does not have any significant effect on the quality of service delivery at the ports.
Ho5: Private ownership, technological application and Operational dependency does not have any significant effect on the quality of service delivery at the ports.
1.6 Scope of the Study
This study focused only on the five key indicators of quality service adopted as the primary parameter to measure quality service delivery in the works of Kotler and Armstrong (2008) and Zeithaml, et al (1988) in their SERVQUAL Model. SERVQUAL as used in the analysis of port service delivery in Nigeria measures: (i) the service expectations of the consumers (importers, exporters and other port users); and (ii) their perceptions of the service received.
The study’s geographical scope covers only the port users and staff of Nigeria port system located in the Nigeria coastal cities of Port Harcourt and Lagos. These major coastal cities house four different major ports in Nigeria. Also of a vital interest were the private operators of these terminals and the staff of Nigeria Port Authority. The experience, comments and observations of these classes of people were utilized in this study. Hence, the staff of the port and customers that uses the ports services (Importers and Exporters) constitutes the unit of analysis.
1.7. Significance of the Study
This study would therefore be beneficial to a varying range of stakeholder groups. The following groups are the primary beneficiaries of this study.
Government and its agencies: The study provides a clear direction on the effectiveness of the privatization of the system. The results will provide a clear parameter of the outcome of the service level of these units that were leased out to some concessionaires in Nigeria. It will help to understand if the companies, government and the nation’s citizens have really benefited in the new arrangement of the port system in Nigeria.
Students and Researchers: The study is a takeoff ground for further study in this aspect of public sector service analysis in Nigeria and beyond. The literature will boost the resource materials available for researchers in public sector marketing.
Foreign investors, Port Users and vessel owners: This study provides the necessary background information needed by the foreign investors, port users and vessel owners to understand the nature of port service delivery in Nigeria.
1.8 OPERATIONAL DEFINITION OF TERMS
Port: A port is a maritime commercial facility which may comprise one or more wharves where ships may dock to load and discharge passengers and cargo.
Nigeria Port Authority: The Nigerian Ports Authority (NPA) is a federal government agency that governs and operates the ports of Nigeria. The major ports controlled by the NPA include: the Lagos Port Complex and Tin Can Island Port in Lagos; Calabar Port, Delta Port, Rivers Port at Port Harcourt, and Onne Port. Operations of the NPA are carried out in affiliation with the Ministry of Transport and the Nigerian Shippers' Council. The Head office of the Nigerian Ports Authority is located in Marina, Lagos.
Operational Dependency: This is the rate at which the clients can rely on the services of the port. A dependency is something you rely upon to achieve a goal but that is not under your control.
Technological Applications: These are the innovations in the payment systems, cargo tracking applications and other innovative practices that has been introduced into the system as a result of port concession.
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