Showing papers in "International Journal of Shipping and Transport Logistics in 2010"

Organisational growth and firm performance in the international container shipping industry

Abstract: Firms buy factor inputs in the factor market and sell value-added outputs to customers in the product market. Firms also engage in economic exchanges along and across the value chain. The combination of these value-adding and exchange functions determine a firm's performance. This paper examines how the factor and product markets are related to organisational capacity and firm performance in the container shipping industry. The findings revealed that the price on the product market is positively related to the production capacity of the industry. This study also illustrates the relationship between firm size and level of vertical expansion for carriers to own ships rather than charter ships from the factor market. A regression equation model is developed to predict the level of ordering new ships by ocean carriers. This study tests the relationship between organisational capacity and firm performance, shedding light on the profitability of ocean carriers.

Efficiency considerations for sequencing and scheduling of double-rail-mounted gantry cranes at maritime container terminals

Abstract: The current decade has seen a considerable growth in worldwide container transportation and with it, an indispensable need for optimisation. This paper seeks to investigate to which extent double-rail-mounted gantry cranes can help to improve a container terminal's efficiency. A simulation study is conducted for evaluating different online algorithms for sequencing and scheduling of jobs for automated double-rail-mounted gantry cranes serving a terminal's storage block. The experiments are based upon scenarios that are derived from the real world (Container Terminal Altenwerder, CTA, Hamburg, Germany) in order to investigate advantages as well as problems and limits of our algorithms and the specific crane systems. Furthermore, the influence of the horizontal transport at the block's interfaces is examined.

Optimal slot allocation with empty container reposition problem for Asia ocean carriers

Abstract: This paper utilises revenue management modelling to make an optimal slot allocation serving a specific shipping service route for ocean carriers. The model, incorporating the expected cost of empty container reposition, is formulated through mathematical programming to maximise operational profit of ocean carriers, subject to some constraints of vessel capacity, container demand and empty container supply. Computational results not only present port-to-port slot allocation to be a guideline to implement space control but also provide a criterion to review the status of strategic alliance among ocean carriers.

Improving port efficiency: a comparative study of selected ports in India

Abstract: In the age of globalisation, seaports play a vital role in connecting national supply chains to the global marketplace. Improving port operations has become a priority for many countries. One of the ways to achieve this objective is evaluating the present efficiency as per the parameters laid down for port industry. This paper measures the efficiency of the major Indian seaports using data envelopment analysis on selected input and output variables. The input variables included – storage facilities, number of berths and number of cargo handling equipments. The two output variables included were average total turnaround time and average output per ship berth day. Six out of 12 ports were identified as efficient ports. Further, an attempt is made to identify various areas for improving the port efficiency based on interviews with port managers from a selected port in India, where the researchers had an opportunity to carry a research project. The interviews were based on a series of qualitative discussions pertaining to the efficiency of ports with the port managers. The study can thus form the baseline on which further adaptation can be made to suit their specific needs.

From multi-porting to a hub port configuration: the South African container port system in transition

Abstract: This paper addresses the tension that exists between multi-porting and a hub configuration in the South African container port system. We apply a generalised cost model to two alternative network configurations: the actual situation of multi-porting and an alternative hub port configuration. The results demonstrate that South African import and export flows are likely to face small cost increases when the port system moves to a hub port configuration. However, from a ship operator's perspective, the hub configuration is more attractive given considerable cost reductions in marine charges, port dues and ship costs. The paper concludes by underlining Transnet's pivotal role in the attractiveness of the hub option and the need for a wider Sub-Saharan strategy in view of making the hub port concept work.

Understanding the complexity of container terminal operation through the development of system dynamics model

Abstract: The competitiveness among container terminals is growing due to the positive growth of containerised shipping. The ability to provide efficient services very much depend on the overall efficiency of the container terminal. However, the operation of the container terminal is complex and consists of many subsystems such as the berth and yard. Moreover, the planning and decision making of the berth and yard are usually conducted separately, not as a whole. Therefore, with the lack of integration between these two major subsystems, terminal managers fail to see the impact of the decision made at the berth to the yard and vice versa. This paper presents the application of system dynamics simulation into capturing the operation processes of the berth and yard. The system dynamics model is able to enhance the understanding on the interdependency and relationship between these two subsystems, thus assisting the terminal managers in decision making.

Employment brand strategy for the shortage of seafarers

Abstract: The shipping industry is facing a global shortage of qualified seafarers. This research aims to answer two research questions namely how the shipping industry and its associated seafaring careers are currently marketed, and how the shipping industry can be marketed more effectively to enhance its image and attract and increase the supply of suitably qualified seafarers. Methodologies include a survey with current and ex-seafarers being students and lecturers at the Australian Maritime College, and in-depth interview with HR managers of ship management companies in Australia. It was found that the shipping industry has no or negative image in the public while current methods of marketing have very minimal effect. Meanwhile, there is also a gap in perception of seafarers and their employers with regards to the attractiveness of seafaring as a career, especially on career path options. This study recommends the development of an employment brand, providing an initial insight into the first two stages of such a development. It was also found that there is significant opportunity for the shipping industry to differentiate itself from other industries, and change the basis of employment competition for seafarers. It is therefore concluded that it is time for the shipping industry to think proactively.

Optimal container dispatching policy and its structure in a shuttle service with finite capacity and random demands

Abstract: This paper considers the container-dispatching problem including laden container distributing and empty container repositioning in a two-terminal shuttle service with finite shipping capacity and random customer demands. Unmet demands within one period due to unavailable shipping capacity or insufficient empty containers will be lost based on the assumption that customers have limited patience and the fact that container shipping is a highly competitive sector. The objective is to seek effective container dispatching policies by minimising the total costs incurred by container inventory, container repositioning and lost sales. The optimal dispatching policy is derived by applying the Markov decision process theory. The structural characteristics of the optimal policy are investigated through numerical examples. Based on these structural properties, a four-parameter threshold policy is constructed. A range of numerical examples demonstrates that the proposed threshold policy performs extremely close to or indeed the same as the optimal policy. More importantly, the proposed policy has an explicit form, which is easy-to-understand and easy-to-operate from the managerial and operational perspectives.

Strategic flexibility choices in the ocean transportation industry

Abstract: Flexibility is an issue widely studied in the manufacturing literature, but only recently has attention been paid to flexibility in logistics and supply chain management. Flexibility is taking prominence due to the uncertainties and disruptions created in the production and distribution processes of an organisation and its respective supply chains. This paper aims at studying the level of transport flexibility achieved in the ocean transportation industry to gain understanding on the strategic choices of carriers to cope with market changes and customer demand. Our analysis indicates the different strategic choices ocean transportation companies need to make with regards to transport flexibility.

What Can We Learn From 259 Years of Shipping Cycles

Abstract: This paper has been written with the author's mind on the recent world banking crisis. Four million dwt of ships are about to be delivered by 2011. Using a very long time series indeed of 259 years for dry cargo freight rate index, we have tried to identify shipping cycles. We did not spot long waves of an average duration of 54 years known as Kondratieff waves. Medium cycles of ten and 20 years have been located between 1741 and 2007. For this purpose, we used the V statistic due to Einstein in 1905. Previous writers (Hampton, Stopford, Randers and Goluke) without nonlinear econometrics reached the same conclusion. The four-year cycle is a fact detected by us in another paper. We also tried to answer the question of the expected end of this crisis. We have chosen the 20 years duration instead of ten. This led us to 2028. Other cycles were also revealed.

Competition, excess capacity and pricing of dry ports in India: some policy implications

Abstract: The pricing of dry ports and allied infrastructure is one of the many controversies of Indian economy at present. It arises out of the need to reconcile the cost of dry port infrastructure investments made by the government, with a long term objective of stimulating the national economy as a whole and regional economy in particular, with the pricing policies adopted by the dry port operator. Thus the role of public investment in infrastructure projects like dry ports is re-evaluated. With the end of public sector monopoly and entry of private sector in the logistics service industry, the resulting competition has raised the sceptre of the need for level playing field among the competitors. This paper shows how appropriate pricing of the dry port infrastructure is desirable for investment costs recovery on one hand but also assist the user in gaining competitive advantage by protecting them from predatory pricing policies of the private sector on the other hand. The paper advocates the need for regulating competition by way of suitable port policy formulation which would be conducive for the growth of international trade in India.

Managing Empty Container Flows through Short Sea Shipping and Regional Port Systems

Abstract: This paper proposes a method for managing the flow of empty containers as an integral aspect in the application of short sea shipping and regional port system operational concepts. The paper finds support for the implementation of short sea shipping along the US West Coast and argues in favour of the establishment of regional port systems to provide an appropriate institutional framework for the coordination of public and private investments in short sea shipping. Overall, the paper finds that short sea shipping represents a viable tactic in the implementation of a regional port system development strategy on the West Coast of the USA and should be considered as a possible method for alleviating landside congestion stemming from commercial traffic in major urban corridors. Specific opportunities for the implementation of this method in Southern California are found with the redirecting of empty container flows to secondary ports, as well as with international movements to and from manufacturing regions on the USA-Mexico border.

Geography Sets the Tone to Tramp Routing

Abstract: The paper compares contemporary routing and scheduling as promoted by decision sciences (DS) with the emergence of operational areas from trade flows and corollary rate levels, both typical geographical issues. DS handle well-structured regional problems from a one-to-three-month perspective with formal models, supported by detailed data, and offer tangible answers for practical use. Geography also prepares quarterly and longer itineraries, subject to cargo availability, but with this being at a global scale between regions rather than ports, is more descriptive than analytical, and acknowledges data shortcomings with ensuing vagueness in results.

Transportation strategy in international supply chains – the case of Russia

Abstract: The purpose of the study is to provide knowledge on the transportation strategies employed in international lean oriented supply chains involving developing economies. In this research work we are interested about the situation in Russia. Five enterprises examined represent mostly international Finnish metal industry companies, having significant global presence and operations. According to the literature review, the functionality of transportation systems can in effect limit supply chain management principles available. International supply chains may be particularly vulnerable. In practice international supply chains in Russia need to compromise both in terms of leanness and agility. Currently, road transport seems to be a better choice to serve the requirements of customers in terms of frequency and speed as railways are considered reliable but slow. On railways, there seems to be room for enhancing efficiency by changing communication procedures. On road, custom procedures reduce efficiency, however, special permits needed for oversized loads increase transportation cost and reduce flexibility. In some products (e.g., after sales, spare parts) country level dedicated warehouses are needed to serve customer demands.

Estimating optimum container and vessel fleet sizes in a cyclic liner service using a holistic approach

Abstract: The management of container fleets, regardless of type and size, is a rather costly operation. A number of strategies are present in the literature intending to efficiently and effectively tackle container utilisation emphasising on the position and allocation of empty containers. These strategies can be roughly categorised in two main groups of studies: container fleet management and fleet size planning. In this paper, a more holistic approach takes place by merging the problems of optimum vessel and container fleet size. The paper develops a model which intends to identify the factors that affect container utilisation in order to enable the effective and efficient operation and control minimising container idle time. Results indicate that the development of such a model can assist container shipping companies in improving their operations since decision-making processes relevant to container fleet size, vessel capacity utilisation, scheduling and frequency of service provided by the operators can be improved.

Estimating technical efficiencies of airports in the Greater China: stochastic output distance function method vs. data envelopment analysis method

Abstract: In this paper, we study the technical efficiencies of Chinese airportsby using multi-output stochastic output distance function analysis. The benefits of this approach are as follows: 1) It allows multiple-output and multiple-input analysis to be conducted in just one equation. However, in single-output production frontier analysis, two stages of empirical estimation are required.; 2) The estimated values of output distance are in fact the technical efficiency scores. We compare and contrast the estimated technical efficiencies computed based on the stochastic output distance function method with those computed based on DEA method. In terms of the ranking of efficiency scores, we conclude that both methods are consistent with each other.

Ocean carriers' transition from transport providers to supply chain integrators: a case study

Abstract: The trend of containerisation is prominent internationally, growing simultaneously with the rate of global sourcing. Ocean carriers face the need to move forward and provide maritime logistics instead of plain maritime transport. This paper examines this transition, analysing the transportation characteristics and the technological means that will promote maritime logistics integration. Through a case study, the role of a fourth party logistics provider (4PL) is examined, as well as its adjustments to the new challenges. An integrated operational model is suggested securing the lean flow of cash, cargo and information.

The use and legal effects of carriage documents in international multimodal transport

Abstract: One element of the supply of international transport services as part of a logistics supply chain is the use of transport documents which exchange and record information and embodies legal significance. Historically, many of these documents developed along modal lines and are paper-based but modern logistics practices and international trade often require multi-modal distribution channels and the greater use of information technology with a possible shift to electronic documents. This paper examines whether, in the light of the evolving operational and legal environment and from an industry perspective, a more flexible approach to carriage documentation could emerge. The paper, based on a qualitative study, comprises five sections. Following the introduction, the research methodology is outlined. Section 3 discusses documents of carriage and legal issues while Section 4 presents the findings from the study. The final section offers some conclusions and suggests that, despite various changes which are moving in the right direction, legacy and uncertainty render various parties reluctant to take advantage of the changing legal framework.

The Air Cargo and Express Industry in Hong Kong: Economic Contribution and Competitiveness

Abstract: With the support of DHL, FedEx, UPS, and TNT (Conference of Asia Pacific Express Carriers [CAPEC] members), we explore the economic contribution and competitiveness of Hong Kong?s air freight and express industry. Our findings show that the industry makes a significant contribution to Hong Kong's economic development and employment. Secondary data analysis reveals that with the rapid development of several airports in the Pearl River Delta region, the competitive position of Hong Kong's air freight and express industry is declining. To identify factors affecting the industry's competitiveness, we conduct interviews and a large-scale survey. The data collected indicate that customer request, customs efficiency, cost, and fast and reliable delivery are the main factors that influence user decisions regarding shipping via Hong Kong. Holdups at China Customs constitute one of the main reasons for cross-border shipment delays and cause great monetary loss among shippers. We also provide recommendations for government policy makers and service providers.

Did the price of second-hand ships follow a predictable path over the period 1976-2008?

Abstract: This paper uses historic data for the prices of second-hand tankers to predict a value for the following 12 months. This then was compared with the actual. Five non-linear forecast methods were tested in a preliminary test and the three more efficient used. Technical analysis was carried out using softwares NLTSA (2000) and MATLAB 5.3. The methods were tested for predicting accuracy inside the sample on the criterion to achieve deviations less than 1%. Then, forecasting outside the sample was attempted. The main results are that second-hand prices time series are not random as believed; they have a long memory and exhibit persistence. There are also out there non-periodic cycles in values, of 48 and 96 months, being more risky for the first nine years (total 22 years). Older analyses used random walk with heavy skewness and heavy kurtosis defeating, thus, their conclusions. They did not realise that this denied normality. The asset play among Greeks for 1992-2004 is also presented.

Designing an E-business Integrative Platform: A Case For the Air Cargo Logistics Industry

Abstract: With the challenges of global e-business, online partnering and collaborative planning increase logistics service agent's competitiveness and enhance logistics process performance. In this paper, we provide a technical design for a website where both commerce activities and business processes are conducted, for the air cargo industry in Hong Kong. This platform website is a fourth party community infrastructure where air cargo logistics services can be designed, traded and managed. The objective of this paper is to show the technical issues involved in designing a platform of this genre. The principal aspects of system requirement, system architecture, interface design and information representation requirement are addressed. We also examine the difference of designing such a platform with more traditional website, as well as highlighting the complexities and issues involved.

An airfreight forwarder's shipment planning: simultaneous decisions on job, route and agent selection

Abstract: Nowadays, because of the emergence of many online logistics platforms – some of which function as virtual marketplaces – airfreight forwarders are facing an increasing number of shipment requests and many choices of collaborating agents. They are also expected to handle a greater variety of shipments from an increasing number of origins and to an increasing number of destinations. In this paper, we address the three inter-related decisions of job selection, route selection and agent selection in the design of a shipment plan. We formulate this problem as a mixed 0-1 LP, with the objective of maximising profit. Using a numerical example, we analyse the effects of job and route selection and provide insights into various aspects of shipment planning.