Possibility of Sustainable Entry into Overseas Port Operation Markets by Japanese Companies

: The Japanese government has set an overseas infrastructure deployment policy to involve Japanese companies in all upstream to downstream processes, that is, from project formation, pro-curement, and construction to operation and maintenance. Although Japanese companies have been hitherto involved in overseas port development through Ofﬁcial Development Assistance, their entry into overseas port operation projects has been limited, meaning the realization of the policy is not expected to be easy. This study thus examines the possibility of sustainable entry into overseas port operation markets by Japanese companies. Speciﬁcally, we review port governance in Japan, characteristics of the Japanese market in the global market, and the status of the participation of domestic terminal operators in Japan and overseas, and then identify the possibilities and methods of sustainable inclusion in the future overseas port operations by interviewing representative companies and the government. We ﬁnally provide future directions in terms of both increasing entry opportunities and improving the entry environment.


Introduction
Through port reforms, port operations have changed dramatically worldwide.Specifically, the terminal operations by the private sector through the landlord model have become the norm [1,2], and global terminal operators (GTOs) have emerged as the responsible actors [3][4][5].Increasingly, they are entering and investing in foreign port operations as a national policy or a corporate strategy [6].Some corporatized port authorities may evolve from know-how consultancy projects to actual investments in overseas ports, as part of their global portfolio development [7].Port-related companies in Asia are also expanding into the global market, with China Ocean Shipping Company (COSCO) becoming the world's largest GTO [8] and South Korea's Busan Port Authority (BPA) expanding its business overseas [9].
With the global port infrastructure market expected to reach 71 billion dollars by 2030 and 95 billion by 2040 [10], the Japanese government has set an overseas infrastructure deployment policy, aiming to involve Japanese companies in all upstream to downstream processes, that is, from project formation, procurement, and construction to operation and maintenance.Although Japanese ports used to be hub ports in Asia and the cargo handling technology of stevedores is said to be the best worldwide [11], the entry of Japanese companies into overseas port operations is infrequent.Although Japanese companies have been engaged in overseas port development through Official Development Assistance (ODA), entering overseas port operations is expected to be difficult for them.The Japanese government recognizes that Japanese companies have not received many public private partnership (PPP) projects at this time and do not have much experience [12].
This study thus examines the possibility of sustainable entry into overseas port operation markets by Japanese companies.Specifically, we review port governance in Japan, the characteristics of the Japanese market compared to the global market for port operations, and the status of participation of domestic terminal operators (TOs) in Japan and overseas.Then, we identify the possibilities and methods of inclusion in future overseas port operations by interviewing representative companies.The novelty of this study is threefold: (1) it focuses on Japanese companies' entry into overseas port operations, which has not been analyzed in previous studies; (2) it examines how the port governance system and history of port policy affect the entry of Japanese companies into overseas port operations markets-this approach is applicable to other countries; and (3) it examines whether the Japanese port operations industry is capable of developing further in the future.
The remainder of this paper is organized as follows.Section 2 reviews previous studies.Section 3 describes the methodology of the interviews, which will be important in Sections 4 and 5. Section 4 summarizes the characteristics of the domestic port operation market in which Japanese companies are engaged in relation to Japan's port policy and governance.Additionally, the entry of Japanese companies into overseas port operation markets is summarized according to the industry sector.In Section 5, we first examine the relationship between the small number of Japanese companies' entry into overseas markets and port governance.Based on the promotion measures and best practices in the policy, we identify the industry-specific issues that hinder the realization of these measures.We then indicate future directions from the perspective of increasing opportunities and improving the environment for entry.Section 6 concludes paper.

Literature Review
When discussing entry in overseas port operations, the privatization of port operations and the underlying port reforms are important.The background of port reforms includes environmental changes such as trade globalization, technological innovation, and a new public management philosophy [13][14][15].With the rapid increase in container handling volume since the 1980s, container vessels became larger in the 1990s [16], and Notteboom et al. [17] point out that this development was accompanied by a narrowing of ports calls and a reduction in their frequency, thus leading to increased competition among container ports.These changes have led to significant movements for both shipping lines and ports.For the former, the formation of strategic alliances and industry restructuring through mergers and acquisitions have been underway since the 1990s, forcing ports to deal with alliance groups with strong negotiating power [17].For the latter, port reforms, which changed port governance structure [18], have been implemented to reduce costs and improve services [19], increase efficiency and productivity [20], and involve the private sector in the financing of infrastructure development [21,22].
At present, many of the world's top 100 container ports have adopted the landlord model [3,22], and through the application of concessions, the privatization of port activities was accelerated, and a port operation market formed [2,15].Farrell [23] classifies the private operators participating in terminal operations into GTOs, regional terminal operators (RTOs), stevedores, shipping lines, freight transport companies, industrial conglomerates, financial institutions, and so on.Currently, it is characterized by GTOs increasing their market dominance through foreign investment with repeated mergers and acquisitions, as well as financial institutions' expansion into the port industry [3,5].Notteboom and Rodrigue [4] attribute GTOs' breakthrough to the transparency of concession procedures and their openness to foreign companies.Moreover, Farrell [23] points out that TOs require adequate funding and high credit ratings, which is why some of the major GTOs (e.g., Cosco, PSA International (PSA), and DP World) are fully or majority state-owned [24].GTOs can be broadly classified into two: stevedore-affiliated and shipping company-affiliated.The former has sought horizontal integration, by expanding and diversifying their business in response to bargaining power over terminals through horizontal integration on the shipping line side [4].The later have developed stockholdings in TOs and vertical integration with related businesses for direct terminal operations to leverage dedicated services at ports [17].
There are previous studies on the entry in overseas port operations.Parola et al. [5] point out that, regarding the pattern of internationalization of TOs, "direct PPP entry strategies" involve the negotiations between the public and private sectors such as concessions and "indirect PPP entry strategies" are transactions of shareholdings in existing PPPs.Direct PPPs were dominant until the late 1990s, whereas indirect PPPs became the dominant strategy from the early 2000s.Satta and Persico [25] refer to emerging international TOs as TOs that adopt an accelerated process, as opposed to the internationalization path followed by traditional GTOs and analyze the differences in their strategies.Although not comparable to TOs, the overseas development of port authorities (PAs) is also progressing [3].For the overseas development of entities with PA functions, the Port of Rotterdam is developing overseas by consulting activities that develop into a management contract and then into joint ventures (JVs) in a stepwise manner [7].The BPA, a PA whose operational functions were separated and corporatized under port reform, established a department for overseas expansion in 2016, a milestone in its determination to be independent of the government [9].In China, the PA function was also separated, and port companies were created as a result of the port reform.Further, port companies such as Shanghai International Port Group (SIPG) are investing in overseas ports [26].
Regarding the entry into overseas port operations based on national policies, there are previous studies on China's One Belt One Road policy (BRI).For instance, Huo et al. [27] analyze in detail the investment projects of Chinese companies in overseas ports and classify them into acquisitions, JVs, concessions, and BOTs as entry modes, with BRI as a driving factor.Karlis and Polemis [28] point out that COSCO's investment in the port of Piraeus was necessary for shipping and economic reasons; nevertheless, the motivation of this decision was not confirmed.Liu et al. [6] show that most Chinese companies involved in foreign port investments are state-owned enterprises (SOEs) and that most port projects are implemented by a small number of SOEs owned by the central government, although provincial and municipal-based SOEs are also active.
Although there are previous studies that refer to port reforms and governance in Japan [29][30][31][32], none of them focus on the overseas deployment of Japanese port stakeholders.Only four Japanese companies are considered by Drewry [8] (three of them being shipping companies), suggesting the limited presence of Japanese companies in overseas markets.However, just as the BRI has been a driving force for Chinese companies to expand overseas, the current Japanese government's policy for overseas development provides an opportunity to examine the potential for Japanese companies to enter the overseas port operations market.

Methodology
Quantitative analysis should be limited because of the limitations on data on handling volume and financial information as the Japanese companies entering the overseas market and those willing to disclose this information are few.However, we organized the information by region, entry mode, degree of control, and partners to provide a comprehensive view of the entry status.For the status of entry into overseas markets, we used press release materials and financial data of each company as data sources, supplemented by Drewry [8].
To identify the status, the problems, and best practices of entry into overseas markets, interviews were conducted with representative companies, advisors, potential entrants, and government representatives.Table 1 summarizes the content of the interviews.The interviews were conducted individually, once for each interviewer, between April 2021 and March 2022 and lasted between 1-1.5 h.Respondents were at the manager-level or above.We requested interviews with companies that had experience in overseas markets and obtained a positive response from a company that had a strong track record of entering these markets, as well as a company that had recently entered such a market.

Port operating company
We requested interviews with a company that had experience in overseas markets.

Developer, construction company, transportation operator
We requested interviews with companies participating in the airport concession market in Japan.We interviewed five companies.
To obtain open-ended subjective opinions regarding the willingness of new entrants in the industry that are not currently entering the domestic or international port operations market: interviews were conducted regarding: • The intention to participate in overseas port operations

Advisor
We requested interviews with advisors who had knowledge of the overseas port operation market through their work, and two major companies agreed to interviews.
To obtain open-ended objective opinions regarding the situation of Japanese companies from an objective standpoint.When considering the entry of Japanese companies in overseas port operations, the entrants into the domestic market should be confirmed.At the dawn of containerization in Japan, the operation of container terminals (CTs) began in the form of leases to shipping companies as dedicated terminals.Foreign shipping companies were also included in a dedicated leasing scheme, but under the Wakasa Ruling of 1969, stevedores were only allowed to undertake stevedoring operations due to their small financial capacity.However, since the 2000s, even terminals dedicated to shipping companies have been subleased to stevedores or leased jointly by shipping companies and stevedores [33].
In the 1990s, the international competitiveness of Japanese ports was declining [34], and after the designation of hub international ports in 1995, which was policy based on the quantitative and geographical arrangement of container ports in Japan, the Super Hub Port Policy was advocated in 2001.By this time, port reforms were underway worldwide, with many countries converting to landlord ports [3], accompanied by the emerging GTOs and their global expansion [5]; countering GTOs' activities was the reason behind the Super Hub Port Policy [35].Therefore, the goal was to achieve services that surpassed those of major Asian ports by fostering domestic mega terminal operators (MTOs).MTOs were jointly owned companies by domestic stevedores [36].In 2004, Super Hub Ports were designated and several MTOs were established as shown in Table S1; however, the vertical division among stevedores continued and no integrated operation by MTOs was virtually realized in these ports.The framework for port operations changed with the introduction of the port operating company (POC) system under the subsequent International Container Strategy Port Policy.The POC system is a system in which a POC-a joint-stock company with a private-sector perspective-rents multiple terminals at a port from the port management body (PMB) and operates them as a single entity.POCs lease terminals exclusively to TOs, that is, shipping companies and stevedores that have been involved in terminal operations.POCs have not yet been sufficiently operated from the private-sector perspective due to the strong influence of PMB's in practice by the two-tier structure of PMB-POC-TO [32].Further, a POC was not intended to be co-owned by stevedores as MTOs were, as shown in Table S2 on shareholder composition.The POCs of international strategic ports, the highest rank under the Ports and Harbors Act, are funded by the national government and are SOEs.
Even after the port reforms, the PMBs in Japan have not been commercialized or corporatized, nor have PA operation functions been separated as in China or Korea [9,26], and port management is still part of local government administration [31].Although there is a growing trend toward private sector involvement through the POC system, especially in large ports, most ports are publicly owned and operated [32].Therefore, the port operation market that private companies can enter is limited, with the participating entities being POCs, their shareholders, and TOs that receive leases from POCs.The shareholders of POCs include a variety of industries, mainly local companies, but it is difficult to affirm that they participate substantially in port operations, and as TOs, they are limited to shipping companies and stevedores.Some foreign shipping companies also receive leases, whereas for stevedores, only domestic companies are involved.The absence of GTOs in Japanese ports will be a major market feature [31,37].However, this does not mean there have been no cases of foreign TOs entering the Japanese port operation market.For example, PSA entered the Kitakyushu Port private finance initiative project in 2000 and International Container Terminal Services (ICTSI) entered the Naha Port CT operation project in 2006, but both have eventually withdrawn from the market.

The Entry of Japanese Companies into Overseas Port Operation Markets
Table S3 shows the history of Japanese companies entering the overseas port operation markets.Table 2 shows the status of their entry in the domestic and international port operation market, while Table 3 shows the entry modes.Detailed data on these are presented in Table S4.A detailed entry status by industry is presented below.

Shipping Companies
The three Japanese shipping companies-Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL), and Kawasaki Kisen Kaisha (K-Line)-have been actively participating in port operations and forming alliances in the international market, responding to the global trends in the shipping industry.Starting with the ownership of local terminal operating subsidiaries in supporting their core business activities in the U.S., they have invested in terminal operating businesses in both Asia and Europe in cooperation with foreign shipping companies and GTOs and in formation of strategic alliances with financial institutions in the 2010s.MOL and K-Line are cost center type companies that support only their own shipping activities, whereas NYK, which has expanded its terminal operating business through the acquisition of Ceres Terminals and investment in Maher Terminals, is classified as a profit center type [17].The participation of Japanese shipping companies in overseas port operation business is unrelated to the government policy based on the timing of the start of a business and is expected to continue in the future, being a main characteristic of the industry.The Japanese shipping industry is most familiar with the overseas port operation market in Japan, both in terms of the number of years and number of cases.

Stevedores
Kamigumi, one of the largest stevedores in Japan, has taken the lead in entering overseas port operations.Its overseas expansion began in 1991 with the establishment of a TO for Laem Chabang port, in cooperation with Marubeni and PSA.Since then, it has expanded its activities to Laem Chabang Port by utilizing the TO, and in collaboration with Mitsubishi, acquired a stake in the TO of Valencia Port in 2014.According to interviews with Kamigumi, this entry mode into the market was initially an initiative of trading companies.However, its aggressive overseas entry continued, acquiring shares in Sihanoukville Port in 2017 (capital increase in 2019), and participating in the BOT project and acquiring the operating right of Thilawa Port in 2019.In particular, since the latter half of the 2010s, when the company gained a certain presence in the Southeast Asian port operation market, it has been proactively entering the market, flexibly responding to the characteristics of each project by entering into joint ventures (JVs), acquisitions, BOT, and concessions.Although the ratio of its capital contribution was minor at the beginning, it has increased to 51% in the Thilawa Port concession project to be completed in 2019.According to the interviews, a major advantage of participating in port operations is the expected earnings from other businesses as a general logistics company.Additionally, in terms of port operations, the CTs in Southeast Asia can handle larger volumes than domestic strategic ports and recognize the experience of more advanced operations than those in Japan through their overseas expansion in cooperation with GTOs; thus, they introduce the latest stevedoring technology quickly and at once, as an effect of their entry.Other than Kamigumi, Tatsumi Shoten's entry into a bulk terminal (BT) in Cai Mep Thi Vai Port is the only other entrant.

Trading Companies
Although trading companies, along with shipping companies, have been the main players in overseas entry to date, the details vary by company.For instance, Marubeni invested in a TO of Laem Chabang Port in 1991, which was the beginning of the entry into the market.Since then, Marubeni has expanded its activities in Laem Chabang Port by utilizing the TO and invested in CT in the Philippines in 1997 and BT in Brazil in 2005.However, it has not actively expanded since then and those investments have been sold.Mitsui followed Marubeni, establishing a TO in Ho Chi Minh City Port with NOL in 1999 and acquiring operating rights in Buenos Aires Port in 2007-both of which were business relationships with partners and minor investments.In 2011, Mitsui acquired a 49% stake in Evergreen CT in Laem Chabang and also acquired Portek, a TO that was already active globally, through TOB.Since then, Mitsui has continued to expand into medium-scale terminals through Portek and has expanded into large-scale terminals in cooperation with domestic and foreign companies, including GTOs.According to the interviews, Mitsui considers port operations a business not for speculative purposes and has entered a wide variety of businesses, including JVs, concessions, and M&As.Mitsui is the only Japanese trading company that has accumulated a relatively large amount of know-how on overseas expansion.Sojitz participated in the operation of a bulk terminal at Cai Mep Thi Vai Port in 2007, whereas Mitsubishi participated in Spain and Colombia in 2014, but not since then.Recently, Itochu has participated in the operation of Lach Phuyen Port and Sumitomo and Toyota Tsusho have participated in the operation of Thilawa Port.Presently, these companies are still evaluating their initial investments and future trends remain uncertain.

POCs
POCs, which came into being through the port reform, are a distinctive feature of port governance in Japan.Although not an entity with sufficient authority, in that the authority of the PMB remains in effect, it is relatively similar to corporatized PA.The Overseas Infrastructure Deployment Act of 2018 allows the POCs of international strategic ports to participate in overseas port operations on their own and also to lead the overseas expansion of Japanese companies.In its first overseas venture, Kobe-Osaka (Hanshin) International Port Corporation (HPC) acquired a 2.5% stake in Sihanoukville Autonomous Port.According to the interview with HPC, this acquisition was not intended to be a participation in the actual port operation, but only in a project investment that Japan International Cooperation Agency (JICA) had paved the way for in response to the government's intention to realize the policy as a shareholder.However, the reason for POCs to enter the market is the expectation of a positive return of international experience to the domestic market and further overseas expansion, including the ability to train employees by expanding overseas.SOEs, which are funded by the national government and must align with national policies, are expected to become important players in the future.

Relationship between Low Entry into Overseas Markets and Port Governance
The Japanese government has indicated the following regarding the situation of Japanese companies' participation in overseas port operations [12]:

•
Japanese companies are not as experienced in overseas PPPs as their foreign counterparts; • Participation in overseas port operations is centered on shipping and trading companies, whereas the participation of stevedores with a strong practical know-how, such as stevedoring at ports, is limited.
The review in the previous section confirms the government's perception.Excluding shipping companies, no part of the industry has tended to participate in overseas port operations, with Mitsui being the only trading company that has participated continuously and Kamigumi being the only stevedore.Although Japanese shipping companies have been participating in overseas port operations to date due to the nature of the industry, the Japanese government considers the lack of entry by stevedores a problem.Additionally, entities with PA functions did not participate in overseas port operations.This can be attributed to Japan's port policy and port governance.
First, as previously mentioned, port management is still conducted as part of the local government administration [31], and all PMBs that have not been corporatized do not participate in the management of overseas ports.Although POCs are expected to expand overseas as part of the national policy, they do not have the know-how and human resources due to their limited authority and short history, or the financial strength, which limits their entry through acquisition to minor investments only.
The environment in which Japanese stevedores have been placed as TOs is unique, in that there has been no competition, as few foreign TOs have entered the Japanese market.Historically, the operation of CTs began as dedicated terminals for shipping companies and this practice has been followed even after stevedores became the operating entity, with Parola and Musso [38], Farrell [23], and Notteboom et al. [17] noting the existence of dedicated and semi-dedicated terminals as a characteristic of Japan's market.Regarding the market as a stevedoring industry, contracts between shipping companies and stevedores have hitherto followed a vertically divided system of shipping companiesprime contractors-subcontractors-with each port maintaining its own market environment while adhering to internal industry regulations requiring prior consultation with shipping companies, the Japan Port Transport Association, and labor unions for the allocation of ships [33].
Given the absence of foreign TOs, the Super Hub Port Policy has been a major turning point.Asian countries have accepted foreign GTOs by introducing privatization policies, while Japan has been concerned with fostering MTOs that are domestic TOs and comparable to GTOs.However, MTOs were not fostered, and the Super Hub Port Policy is said to have failed, the reason being that port stakeholders did not understand the international situation and could not flexibly change the existing system due to their domestic emphasis [34].As such, the independent TOs in Japan, as an industry, are underdeveloped [39].Considering the path dependency often discussed in relation to port reform [40], the Japanese port industry adhered to its previous practices because it used to be more competitive than other Asian countries and had a certain international market share.However, some criticize the Japanese government's failure to recognize the urgency of the reform and to take decisive action, which contrasts with other Asian countries that have demonstrated strong leadership [34].As described above, domestic stevedores did not need to enter overseas port operations because of the stable domestic market environment.The lack of separation for PA functions and the fact that MTO, which was targeted in the port reform, was not realized due to path dependency, have not fostered port operations by the domestic private sector as an industry.As a result, similar to the airport operation market [41], most companies have only been active in the Galapagos market, which is not a part of the global market; this is now an issue when entering foreign markets.The trading companies have not been able to enter the domestic market, although they have entered the overseas port operation market.Based on the interviews with trading companies, the reasons cited include the difficulties in entering the Japanese port business due to its unique characteristics and historical background, the fact that Japan is a developed country for which future growth in cargo volume is unlikely, and the lack of operational flexibility under the domestic port governance system.The main purpose of port operations is often not the operation, but securing resources and the development of industrial parks, among others.Additionally, there have been many withdrawals due to trial and error.Positive press releases regarding the withdrawal have been few and obtaining accurate answers in the interviews is difficult due to the confidential aspects of the withdrawal.As a characteristic of the industry, investment in ports is only one segment of many business portfolios, and therefore, there is internal competition for profitability with businesses other than port operations.If the return on investment is judged to be low, the company is expected to withdraw quickly.In the case where the company entered the port operations in combination with securing interests in natural resources, it may withdraw from the port operations and simultaneously withdraw from the resources in question.As described above, compared to industries whose main business is port-related, it is assumed that they tend to withdraw unhesitatingly without regard to their reputation within the market.
Currently, in Japan, the government is promoting airport concessions, and an airport operation market is being formed, with companies without previous experience in infrastructure operation entering the market [41].According to the interviews with companies with experience in airport concessions, no companies indicated the intention to actively participate in the port operation market because: (1) there is no experience in port operation in Japan and there are no advantages to participating unless combined with urban development; and (2) although developing countries are expected to be a realistic market for port operations, entering a country where demand is uncertain is a risky proposition.In other words, the expansion of the market to other industries is not expected at this time point.

Problems Facing the Policy
Given the low number of entrants, the government policy proposes the following promotion measures:

•
Efforts should be made to form projects that provide public facility development through ODA and operation through PPP; • Japanese companies should accumulate knowledge and expertise on PPPs by increasing their entry in relatively low-risk projects, such as brownfield projects, whereas Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) should be used more actively.This is because JOIN invests in advancements in the high-risk seed stage and progresses the projects to the stage where the private companies can make investment decisions; • POCs of international strategic ports will be promoted to participate in the operation of overseas ports in cooperation with stevedores.
JOIN is a Japanese government-private sponsored infrastructure investment fund company established in Japan in October 2014, whose aim is to encourage Japanese companies to utilize their accumulated knowledge, technology, and experience in the field of infrastructure to expand overseas.According to the interviews, the Japanese government recognizes the Thilawa Port project as best practice, and the entry process is shown in Table 4.This is a best practice because: Japanese companies are involved from upstream to downstream processes, which is the government's goal; the government, JICA, and JOIN are involved, which facilitates private sector participation in the operation phase; and a stevedore is included in the operating entity, which is expected by the government.Increasing the number of entries through a similar process is the government's approach to promotion.According to the interviews with Sumitomo, as the project was an ODA project and JOIN participated in the project, it helped the company enter the market, including the formation of internal consensus.Government involvement and investment by JOIN seem to function as policy support, especially for firms that are unfamiliar with the market.However, apart from the shipping companies that have already been a part of GTOs, the following problems remain: [Common]

•
Although Japanese companies have a certain presence in the Southeast Asian market, they are not in the inner circle of the global port operations market.As a result, the information they can obtain is limited;

•
The private sector does not understand the projects because the government does not disclose enough information about them.If the government had a database of projects and actively disclosed information, private companies would be able to prepare for projects at an early stage.Additionally, past projects have not been evaluated, which increases risks for private companies; Although it is easy to enter G-to-G projects and ODA projects, withdrawing from these projects even if they turn out to be unprofitable is difficult, and a company may be affected by participating in such projects.If government support is not available, the decision to enter the market must be carefully evaluated;

•
Although Japanese companies have a reputation for being fair in business, Japanese firms are sometimes avoided as partners because of their slow decision-making.The lack of communication skills, along with the operational know-how, and the inability to negotiate in English are additional problems. [POCs] • Although POCs are necessary under the unique Japanese port governance system, being neither PAs nor TOs, they are merely subleasing real estate rather than operating ports, and since they are not engaged in actual stevedoring operations, they have no role to play under overseas port governance;

•
As there are no personnel who can deal with overseas projects, it will take a considerable amount of time for POCs to participate substantially in port operations within their areas of expertise.It is possible for POCs to invest as SOEs in projects by JICA and JOIN, but for the time being, they must only invest in such projects.As POCs do not have the capital strength, participating in large projects on their own is impossible. [Stevedores] • Attracting shipping companies is a major challenge for Japanese stevedores, making it difficult for them to enter the market on their own, without working with shipping companies.Their capital strength is small compared to domestic trading companies, in addition to GTOs, which limit the number of projects they can enter and the control they can exert;

•
In Asian CTs, GTOs have introduced the latest stevedoring technology quickly and are handling a large volume of cargo, thus their stevedoring operations are more advanced than those of Japanese strategic ports, meaning a gap is beginning to emerge between their stevedoring technology and that of Japan.
[Trading companies] As it is not possible to expand overseas after gaining experience and know-how in the domestic market, full-scale entry into overseas markets requires careful judgment and time.This makes it difficult for trading companies to enter the market as an industry;

•
The market they were allowed to enter is a niche market.Capital is not sufficient for larger acquisitions;

•
Although investment risk reduction by JICA and JOIN is effective for less experienced companies, it is unnecessary for experienced players from the viewpoint of securing as much of the investment ratio in high-quality projects as possible.
As many companies mentioned capital capacity at the time of entry into port operations as an issue, Table 5 compares each company's capital and credit rating, as an indicator of their ability to raise funds, with those of the representative GTOs.While there is certainly a difference in terms of capital, Japanese TOs do not have a problem in terms of their ability to raise funds in terms of credit rating.They should be viewed as being internally limited in the scale of investment due to their lower degree of focus on overseas port operations.Conversely, if recognized as good projects, they would have the capacity to invest in overseas port operation projects.

Future Directions
Although Mitsui as trading company and Kamigumi as port operator-in addition to shipping companies-have been the main players in overseas market entry, these companies have entered the market on a business basis even before the policy was implemented.In Japan, there are many stevedores that have the same level of experience and capital strength as Kamigumi but have not entered overseas markets.Further, given that there have been many cases of withdrawal by trading companies, there are limits to their entry on a business basis, meaning that their prospects will vary depending on whether the government initiatives triggered by the policy are effective.Therefore, the following policy enhancements and port governance reforms might promote the sustainable entry from the perspective of increasing entry opportunities and improving the entry environment.
First, in terms of policy enhancement, as previously mentioned, the number of industries participating in the port operation market is not expected to expand.According to the interviews, companies with a certain level of experience are positive about their future entry intentions because they have enjoyed the benefits of entry, whereas companies that have recently entered the market will make a decision on future entry depending on the evaluation of their first project, and inexperienced companies have no intention to enter the market.In other words, familiarity with the market and the benefits of entry are thought to lead to continued entry.With regard to the target markets of the companies indicating their intention of entry, they all share the same desire to enter growing markets, especially Asia in the immediate future and Africa in the future.As for the desired mode of entry, they do not seem to adhere to a particular one but are prepared to respond depending on the project.However, the results show that trading companies, port operators, and POCs, in that order, desire a higher degree of control.The stevedores prefer to cooperate with shipping companies rather than enter the market alone from the perspective of attracting shipping companies; whereas, the POCs recognize that minor investment is the limit at this point due to the challenges of human resources, substantial management know-how, and financial capacity.For Japanese companies, excluding shipping companies, a strategy should be set to increase the number of projects by either making minor investments in cooperation with GTOs in markets with high handling volumes or making major investments in niche markets, aiming for further entry opportunities by being recognized as a market player.Specifically, the following policy enhancements might be considered:

•
Although the government's promotion measures are expected to have a certain effect on entry to minimize the risk for Japanese companies entering the market, it is necessary to speed up JICA's feasibility study and JOIN's due diligence and enhance information disclosure by the government to ensure that companies have time to consider and prepare for projects.Additionally, since ODA and G-to-G projects make it difficult for the private sector to exit, the government needs to select projects that are desirable for the private sector to enter; thus, it is necessary to reduce the risk of entry by institutionalizing support, such as debt guarantees by the government; • For Japanese companies with few entry opportunities to fill their experience gap in a short time, an accelerated process, as pointed out by Satta and Persico (2015) [25], is an option; acquiring an existing TO is also an effective way to enter the market, especially for companies with no experience.POCs as SOEs and trading companies with relatively large capital are good candidates, but both face the problem of capital strength.For Japanese companies to make acquisitions of a certain scale while securing control, government financial support for POCs and cooperation among domestic companies are necessary;

•
Although the government has given examples of cooperation between POCs and stevedores, an all-Japan, cross-industry, complementary collaboration is required, including shipping companies that could become terminal users and trading companies that have connections with local companies and the know-how to develop in new markets.In such cases, POCs need to play a coordinating role as SOEs;

•
The Japanese stevedoring technology is strongly based on the experience of operators.Although it is highly likely that the Japanese stevedoring technology will not be accepted in ports that aim to introduce state-of-the-art technology, it is highly likely that it will be a good match for ports oriented toward upgrading through human resource development.Specifically, CTs handling below 1 million TEUs should be targeted.If the Japanese stevedoring technology becomes obsolete compared to that of GTO-operated ports, which are rapidly adopting cutting-edge technology, it will not only reduce the potential for stevedores to enter overseas markets, but also the competitiveness of Japanese ports.As shown in previous studies [42,43], the application of telematics improves port performance, but Japan lags behind other countries in this field [44].It is thus necessary to add an incentive to enter overseas markets by collaborating with GTOs, accumulating know-how on stevedoring automation, and feeding it back to the domestic market;

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To build a presence in the overseas port operation market, it is necessary to establish adequate technologies and know-how, because some advantage is required.For example, Japan is currently pursuing a carbon neutral port policy, meaning the decarbonization technology accumulated in Japan can be an important tool for overseas expansion.Although the remote control and automation of RTGs has not progressed and Japan lags behind other countries [44], Japan is aiming to realize AI terminals.Japan's high-quality, highly productive stevedoring technology [11] is strongly dependent on the skills and on-site know-how of workers, which is why strategies such as making AI learn these skills and know-how are necessary.
Regarding the improvement of the entry environment, the current lack of entry is largely due to port governance, and reform is required to promote entry.Specifically, the following points should be considered:

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Although POCs have many roles to play in entering overseas markets, they are not in a management environment with a degree of freedom as high as private companies because they are strongly influenced by conservative PAs that pursue regional interests through the dispatch of directors.If POCs have authority as PAs and manage their operations with a high degree of freedom, they might become more aggressive in entering overseas markets;

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To foster the momentum to enter overseas markets, it is a prerequisite to consider the development of the port operation industry, which has hitherto failed.In doing so, it is necessary to enhance the competitive environment of the domestic port operation market by shifting completely from the tool model to the landlord one, developing a highly liberal and competitive operating environment, and accepting the entry of GTOs and trading companies.This will allow Japanese port stakeholders to become accustomed to a global standard port operating market and develop an international sense, including negotiation skills, which will increase their motivation to enter overseas markets.

Conclusions
Japan's overseas development policy aims to encourage Japanese companies to actively participate in overseas port operations.However, Japanese companies have not hitherto participated in overseas port operations and their market presence remains low.
In this study, we reviewed the entry of Japanese companies into overseas port operations, considered the reasons for this lack of entry in relation to Japan's port reform and port governance, identified the problems that need to be addressed, and indicated future directions to promote sustainable participation.
Although POCs are expected to expand overseas, their entry is limited to only minor investments through acquisition.Although Japanese shipping companies have been actively participating in overseas port operations, Mitsui is the only trading company that has participated continuously and Kamigumi is the only stevedore.In Japan, there are many stevedores that have the same level of experience and capital strength as Kamigumi but have not entered overseas markets.Although the trading companies have entered the overseas port operation market, there have been many withdrawals due to trial and error.The Japanese port governance system and the history of port policy have influenced this situation.
In Japan, privatization through the commercialization, corporatization, and separation of PA functions has not progressed, and entities with PA function have not entered the overseas market.Instead, a POC system has been introduced, and although it is expected to lead the way in overseas development, it still faces challenges in terms of authority, human resources, and financial resources.Shipping companies have entered domestic and overseas port operations, but stevedores, which the government expects to enter overseas markets, have been satisfied with the Japanese domestic market, which can be described as a Galapagos market; thus, they have not had the motivation to enter overseas markets until now.Despite their advanced technology, Japanese stevedores may become obsolete compared to overseas ports, where the latest technology is rapidly introduced by the GTOs.As such, overseas entry is necessary to revitalize the domestic market.Although Japanese trading companies have some experience in entering overseas port operation markets, the industry is not aiming to enter overseas markets due to port governance that virtually prevents them from entering the domestic market.
Considering this situation, the increase in entry opportunities by strengthening the policies currently in place and the improvement of the entry environment by reforming port governance might promote the sustainable entry of Japanese companies, which lack experience and have capital challenges, into overseas port operations.
One significance of this study lies in revealing the entry status in the overseas port operation market by Japanese private companies, which have been active in a unique domestic market without overseas TOs and have a low presence in the global port operation market, with the exception of shipping companies.Furthermore, this study's approach of examining the entry status in relation to port governance systems and port policies is a significant academic contribution.The accumulation of studies on the entry of port-related firms into overseas port operation markets, which are affected by various port policies and port governance systems in each country following port reforms, should provide a strong basis for predicting the port operation market in the world.
Future research directions include the following.It is necessary to evaluate past entry cases from the companies' perspectives, classify them into successes and failures for the entrants, and examine the measures to promote entry by organizing the factors that contributed to the successes and failures.Next, based on the characteristics of each industry and the market, it is necessary to consider how domestic companies in each market can collaborate.Furthermore, although this paper presents decarbonization and AI technologies as strengths for Japanese companies to enter overseas markets, it is necessary to consider strategies for countries and ports to develop these technologies and in what ways.

Supplementary Materials:
The following supporting information can be downloaded at: https://www.mdpi.com/article/10.3390/su141912167/s1,Table S1: Shareholder composition of mega terminal operator; Table S2: title; Shareholder composition of port operating companies, Table S3: History of Japanese companies' entry into overseas port operation markets, Table S4: Details of Japanese companies' entry into overseas port operation markets.

Table 1 .
Summary of interviews.

Table 2 .
Status of the entry of Japanese companies into overseas port operation markets.

Table 3 .
Entry mode to the port operation market of representative Japanese companies.

Table 4 .
Entry process for the Thilawa Port project.

Table 5 .
Status of the entry of Japanese companies into overseas port operation markets.