Development prioritization through analytical hierarchy process (AHP) - decision making for port selection on the one belt one road
| Published date | 07 October 2019 |
| Pages | 121-150 |
| Date | 07 October 2019 |
| DOI | https://doi.org/10.1108/JCEFTS-04-2019-0020 |
| Author | Omar Khalid Bhatti,Ali Raza Hanjra |
| Subject Matter | Economics,International economics |
Development prioritization
through analytical hierarchy
process (AHP) - decision making
for port selection on the one
belt one road
Omar Khalid Bhatti
Department of Business and Management, Istanbul Medipol Universitesi, Istanbul,
Turkey and Department of Business Administration, Iqra University,
Islamabad, Pakistan, and
Ali Raza Hanjra
ITTMS (CAREC-RIBS) Program, Pakistan Customs, Government of Pakistan,
Islamabad, Pakistan
Abstract
Purpose –This paper aims to attempt to investigateif the now-existing upstream Sost Dry Port in Gilgit-
Baltistan and the prospectivemidstream Havelian Dry Port in Khyber Pakhtunkhwa, both part of One Belt
One Road (OBOR), are expectedto compete against or complement each other in terms of port efficiencyand
location, and which of the two ports shouldfirst be developed in the wake of uninterrupted logistics flow of
cargo on the EconomicCorridor.
Design/methodology/approach –Analytic hierarchy process (AHP) has been used for multi-criteria
decision making by the stakeholders.Five main criteria for transhipment port selection, ranging from port
location, port efficiency, intermodal connectivity, port costs and cargo volume were used with three sub-
criteriaeach.
Findings –This study demonstratesthe results that favour physical infrastructuraldevelopment initiatives
prioritized for the Sost Dry Port in view of its strategic location as the upstream supply chain node on the
EconomicCorridor, imparting efficiency to the logistics flow.
Practical implications –Results of this studymay assist policymakers in achieving goals like enhancing
trade facilitation,reducing congestion and increasing cargo securityon OBOR.
Originality/value –To the best of the authors’knowledge,this is the first study of its kind that analyzes
priority for immediatedevelopment intervention for either Sost or HavelianDry Port, both located on CPEC –
OBOR supplychain.
Keywords Logistics, AHP, CPEC, OBOR, Trade facilitation
Paper type Technical paper
1. Introduction
1.1 One belt one road
China has initiated a revival of the Silk Road based on land and maritime logistics and
transportation networks connecting Asia, Central Asia, Europe and Africa through “One
Belt One Road (OBOR)”thereby creating new marketsfor Chinese companies and tackling
industrial overcapacity (Summers, 2016;Amir, 2016). This vision reflects China’s desire to
Analytical
hierarchy
process
121
Journalof Chinese Economic and
ForeignTrade Studies
Vol.12 No. 3, 2019
pp. 121-150
© Emerald Publishing Limited
1754-4408
DOI 10.1108/JCEFTS-04-2019-0020
The current issue and full text archive of this journal is available on Emerald Insight at:
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establish strong ties with its neighboring countries to access more strategic maneuvering
space in Asia and Europe (Wang, 2016). OBORconsists of six economic corridors, i.e. China-
Pakistan Economic Corridor (CPEC), China-Mongolia-Russia Economic Corridor (CMREC),
New Eurasian Land Bridge (NELB), China-Central and West Asia Economic Corridor
(CCWAEC), China-Indo-China Peninsula Economic Corridor (CICPEC), and Bangladesh-
China-India-Myanmar Economic Corridor (BCIMEC). The proposed China-Pakistan
Economic Corridor (CPEC) is the first of the OBOR initiatives that has been formally
recognized between China and Pakistan and encompasses the ongoing development of a
supply chain route with many existing and proposed transhipment nodes and Special
Economic Zones. This Corridor bilaterally connects the hinterlands of China to the ports of
Karachi and deep sea portof Gawadar in Pakistan (Xie et al., 2015)(
Figure 1).
1.2 Transhipment port selection
Transhipment is the process of off-loading a container from one vessel and loading it onto
another vessel at an intermediate destination, known as transshipment port, for sending
to yet another destination. Transhipment port selection is considered significantly
important for policymakers, port operators and logistics providers in terms of port
investment and time of logistics flow (Haralambides, 2002). The existing upstream Sost
Dry Port in Gilgit-Baltistan, neighbouring China, and the proposed midstream Havelian
Dry Port in the adjoining Khyber Pakhtunkhwa Province in Pakistan, are the
transhipment terminals on CPEC. In view of the geographical and strategic complexities,
and huge volume of future containerized traffic, choosing either of the two ports for
prioritized development is a multi-criteria decision-making (MCDM) problem. Provision
of physical infrastructure, logistics Suprastructure and related value-added services at a
port would increase in port efficiency (Hanjra et al., 2017). Selecting a port location for
Customs clearance and handling for the incoming and outgoing cargo is a strategic
decision (Beresford et al., 2012). This study therefore explores whether the two ports are
expected to compete against or complement each other in terms of port efficiency and
location, and which of the two ports should first be developed in the wake of
uninterrupted logistics flow of cargo on the Economic Corridor.
Figure 1.
One Belt One Road’s
six economic
corridors that
strategicallyconnect
China with South
Asia, CentralAsia,
Eurasia andEurope
through a vast
network of roads,
railways, pipelines
and maritime supply
chain routes
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