The use of land as an exhaustible resource in ports

Introduction:
An increasing number of ports are facing a shortage of land as port activities compete for space with the needs of urban and industrial development and preservation. While land use is critical for port developments, very often its use has been allocated in the past with limited foresight on societal and port priorities in the future. Notwithstanding the costs associated with the redevelopment or cleanup of port lands, very little is known about the role of land as an exhaustible resource in the port sector. Exhaustible resources, such as land or minerals, were studied in the past because their scarcity could increase the competitive advantage of the firms controlling them. Today exhaustible resources are turning into a liability for firms, as a result of changes in energy use and the increasing importance of sustainability. Exhaustible resources are increasingly seen as a risk and a source of costs as firms need to adapt and respond to changes in the availability of the resource.

Objective:
This paper investigates the application of resource management theories in the port sector, and determines what theories offer a useful foundation to study how land use in ports can respond to changes in port activities, the operating context of ports and global supply chains. Examples of resource management theories are a resource-based view, the exhaustible resource theory, and the life cycle cost theory. Inexhaustible resources are expected to provide infinite services under the assumption that they are exploited in a proper way. The agricultural use of land is an example to illustrate this. If fertilized in the right way and the land is cultivated over time with different crops, agricultural land can be used for this purpose forever. Therefore, in theory agricultural land is considered to be inexhaustible. In case of excessive use, agricultural land can become poor and unusable for growing crops. Although agricultural land is considered to be inexhaustible, the land can still become exhausted. In this example costs of fertilization can prevent exhaustion. Also, human made resources can become exhausted and the services provided by this kind of resource can end. Example is a heritage-site like Venice as a resource for the tourism industry. Venice is expected to last forever as a touristic site and many firms use Venice as a resource to earn money. However extensive tourism and the mooring of cruise vessels might damage old structures and buildings permanently. If Venice as a resource is exhausted and gets lost, the structures and buildings can be replaced, however the original heritage will be lost forever. The examples of agricultural land and Venice also apply to land use in ports. Contamination of the soil or expensive demolition of constructions can limit the re-use of land. What costs should be included in the resource rent for the use of land in ports to avoid exhaustion? Resource rent is the price for the output of a resource minus the cost for the use of the resource and an additional return. If all costs for the use of land are included in the resource rent, no unexpected costs will occur in case of a sudden ending of the use of the land as a resource. Unexpected costs can influence decisions when ending the use of land. For instance, the re-use of existing land can be less attractive than relocating to a new place requiring new land; Using new land avoids the costs of cleaning up the remains of the old activity. Not including all costs in a resource rent can result in unexpected costs or in a scarcity rent to be paid for by future generations. This paper studies how the theory for natural exhaustible resources could apply to resources that are inexhaustible and/or are human made, but in danger of being lost for future use. Applied to the port sector it is explained what costs should be included in the resource rent for the use of land and infrastructure to maintain the ability to re-use the land for other purposes at any time.

Arènso Bakker is a part-time PhD candidate and started at the KLU in Oktober 2021. His supervisors are Prof. Dr. Michele Acciaro and Prof. Dr. Gordon Wilmsmeier. The topic of land use is relevant in ports and logistic areas and important from social corporate responsibility perspective. In his daily work Arènso is advisor to international industrial companies and public bodies for land transactions, valuations and disputes in the build environment.