Original research

DIGITAL TRANSFORMATION IN PORTS AND SUSTAINABLE PERFORMANCE OUTCOMES: THE MODERATING EFFECT OF CUSTOMS MODERNIZATION

Pages 269-284

10.61552/JEMIT.2026.03.004

Sohail Tariq, Shahzad Ahmed Khan, Asad Javed, Fahad Al Otaibi

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Abstract This study explores the importance of Smart Port Practices (SPP) in relation to improving Port Sustainable Performance (PSP) and in particular the moderating effect of institutional modernization, as is the case with Pakistan Customs Modernization (PCM). The study adopts a quantitative, cross-sectional design and uses survey data on the groups of port authorities, terminal operators, logistics companies, and customs officials working in one of the largest seaports of Pakistan, Karachi Port and Port Qasim. The results of the analysis are obtained with the help of Structural Equation Modeling (SEM), the results prove that the adoption of SPP, including smart automation, data analytics, integration of the Internet of Things (IoT), and the utilization of digital platforms, is significantly positively associated with the concept of multi-dimensional port sustainability, as the metrics of economic, operational, and environmental indicators. Institutional theory helps to develop a detailed mechanism of external regulatory systems, industry practices, and institutional fit to influence the implementation and success of digital transformation efforts in the port sector and the role in the development of relations between technological adoption and sustainable performance results, played by customs modernization. The research provides unique empirical data in a developing economy setting, which shows that modernization of the technological port and modernization of the institutional regulations are not coextensive processes but rather complementary. Modernization increases the effects of SPP on sustainable performance by minimizing administrative delays, and increasing the transparency of the procedures and the visibility of the supply chain. The study provides practical information to port managers and policymakers, proposing a comprehensive and integrated approach to the operation of the port using technology to link operational and regulatory aspects and attain competitive and sustainable port ecosystems..

Keywords: Smart Ports Practices, Port Sustainable Performance, Customs Modernization, Port Community System, Institutional Theory, Structural Equation Model.

Recieved: 11.01.2026. Revised: 17.02.2026. Accepted: 09.03.2026.