2- lecture 2 handout.pdf

8/22/2019 2- lecture 2 handout.pdf

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Ship

Peter Wong

Objectives

Types of ship available

Historic reasons for changes

How these changes affect our operations

Ship container port relationship

Ship Hull Design


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Ship type container ship

Ship type bulk carrier

Ship type bulk carrier


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Ship type general cargo

Ship type general cargo

Ship type hatch cover crane


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Ship type car carrier

Car Carrier

Ship type - RoRo


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Ship for energy trade

Ship type crude oil carrier

Ship type LNG carrier


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Special ship type

Ship type - dreger

Ship type - passenger


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Ship type - tug

Ship profile

Container ship

Containerisation 1955 Conbulk conversion

Mainly for cabotagetrade

Purpose built vesselstarted from 1960s

Deployed for oceangoing, deep sea

Termed as fully cellularship

DWT replaced by TEU


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Capacity - TEU

400 1,000 first generation

1,001 2,000 second generation

2,001 3,000 third generation

3,001 4,000 forth generation

(POST PANAMAX)

Etc

4,0001 - . . . . . Mega carrier

SPEED

Fast (18-25 knots)

Slow (12-18 knots)

Service speed

Optimum speed trade speed

Design speed naval architect

Operating speed daily speed

Changes of vessel design

Steam ship Gas turbine

High speed, high bunker cost

Additional fuel cost - diesel

Motor vessel Slower speed, cut off during rough weather

Current configuration Same bunker type


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Speed = cost

1912

2413

3014

3615

44Daily fuel charge: (7.3 barrels x $90 x 44)

16

Main engine fuel consumptiontons/day

Speed

Speed and Size

269,310Maersk2003

2714,500Maersk2006

256674P & OCL1996

258680Maersk1997

24.54832APL C111995

244743NYK1994

244340APL C101988

SpeedCapacity Teu

Propulsion - bhp

K98MC-C 93,120RTA96C 89,6401995

K90MC-C 70,320RTA84C 65,4001990

K90GFCA 47,300RLB90 - 48,0001980

K90GF 40,900RND90 34,8001970

MAN - B&WSulzer


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Ship Size

Panama Canal

Refrigeration

New extra electrical power for refrigeratedcontainers

Extra set of electrical generator

Duplicated generators

Safety

Stable electricity supply

Reduce carrying capacity of the ship

Facilitator for containerisation

UNCTAD liner code 40/40/20

Developing countries national fleet

World bank develop the terminalshttp://www.worldbank.org

EU ship owners hold a negative view aboutcontainerisation initially

UNCTAD not getting along with shipownerassociations


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Stakeholders of Sea Transport

Objectives

Who controls the shipping services

How can they control this industry

Why we need to know them ?

Global issue

Although they look quite remote from us,their decisions affect everyone

Any changes in future shipping industry,come from these organisations


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BIMCO

The Baltic and International Maritime Council

established in Denmark in 1905 worlds largest international shipping association with

approximately 2,550 members in 123 countries.

The owner-members of BIMCO control a fleet of about 525million DWT thereby representing 65% of the worlds merchantfleet.

www.bimco.org

BIMCO services

Laytime and Timecharter issues

Interpretation on contractual issues, opinion on shippingclauses and charter parties

Intervention Services, i.e. BIMCOs bad debt collection andcompany background information service

Ice Reports

IMO

International MaritimeOrganization

www.imo.org


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IMO - mission

to provide machinery for cooperation among Governments in thefield of governmental regulation and practices relating totechnical matters of all kinds affecting shipping engaged ininternational trade;

to encourage and facilitate the general adoption of the highestpracticable standards in matters concerning maritime safety,efficiency of navigation and prevention and control of marinepollution from ships".

The Organization is also empowered to deal with administrativeand legal matters related to these purposes.

IMO

Focus on International Convention for the Safety of Life atSea (SOLAS), since 1960.

matters such as the facilitation of international maritimetraffic, load lines and the carriage of dangerous goods,while the system of measuring the tonnage of ships wasrevised.

a new problem began to emerge - pollution. The growth inthe amount of oil being transported by sea and in the sizeof oil tankers was of particular concern.

UNCTAD

United Nations Conference onTrade and Development

www.unctad.org


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UNCTAD

Established in 1964, aims at thedevelopment-friendly integration ofdeveloping countries into the world economy.

UNCTAD mission

focal point within the United Nations for theintegrated treatment of trade and development andthe interrelated issues in the areas of finance,technology, investment and sustainabledevelopment.

forum for intergovernmental discussions anddeliberations, supported by discussions withexperts and exchanges of experience, aimed atconsensus-building.

UNCTAD mission (contd)

undertakes research, policy analysis and data collection inorder to provide substantive inputs for the discussions ofexperts and government representatives.

in co-operation with other organizations and donor countries,provides technical assistance tailored to the needs of thedeveloping countries, with special attention being paid to theneeds of the least developed countries, and countries witheconomy in transition.


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UNCTAD

Liner code in the 70s

40-40-20 cargo reservation

Strong opposition from shipowners

40-40-20

40 % carried by export country

40% carried by import country

20% shared by others

World Bank

www.worldbank.org


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World Banks mission

to fight poverty and improve the living standards ofpeople in the developing world.

provides loans, policy advice, technical assistanceand knowledge sharing services to low and middleincome countries to reduce poverty.

promotes growth to create jobs and to empower poorpeople to take advantage of these opportunities

World bank

Help to construct new container terminals indeveloping countries

Promote containerisation

Over invested in many countries

Classification society

http://www.iacs.org.uk/members.htm


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Classification society

http://www.classnk.or.jpNIPPON KAIJI KYOKAI

http://www.lr.orgLLOYD'S REGISTER

http://www.dnv.comDET NORSKE VERITAS

Norway

http://www.veristar.comBUREAU VERITAS -F rance

http://www.eagle.orgAMERICAN BUREAU OF SHIPPING

P & I Club

http://www.ukpandi.com

P & I Club

P&I is insurance in respect of third party liabilitiesand expenses arising from owning ships or operatingships as principals.

It is not hull insurance, war risk insurance, loss ofprofit/freight insurance, detention insurance, strikeinsurance or uninsured legal expenses cover


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P & I Club Cover -1

1. Personal injury to or illness or loss of life of crewmembers

2. Personal injury to or loss of life of stevedores3. Personal injury to or illness or loss of life of

passengers and others4. Loss of personal effects5. Diversion expenses6. Life salvage

P & I Club Cover -2

7. Collision liabilitiesi. One-fourth collision liabilityii. Other risks excluded from the Running Down Clauseiii. Excess collision liability

8. Loss or damage to property other than cargo

9. Pollution10. Towage contract liabilities11. Liabilities under contracts and indemnities12. Wreck liabilities

P & I Club Cover -3

13. Cargo liabilities

14. Cargo's proportion of general average orsalvage

15. Certain expenses of salvors

16. Fines

17. Legal costs

18. "Omnibus" cover


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P & I Club Cover - 4

19. Overall conditions of cover

20. Exclusion of war risks

21. Selection by shipowners of particular headsof cover and of deductibles

22. Cover for charterers

23. Additional Covers

Stakeholder

Shipowner

Very personal

Bankers

Very personal

Shipping service type

Cabotage

Coastal routes

Confined to national

Inland waterway

Extensive use in Europe, China . . Etc


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Shipping service

Tramp and Liner

Liner and Tramp

Tramping Liner ShippingTransportation demand

Number of shippers Few Many

Quantity Big Small

Density High (weight) Low (volume)

Unit Value Low High

Regularity Low High

Transportation supply

Contract Vessel (C/P) Goods (Bill of Lading)

Vessels Liquid a nd bul k vessel s Gen er al Ca rgo

Frequency Low High

Implications

Goods Liquid and main bulk

commodities

Minor bulk and general cargo

Services Suppl y/ de ma nd r egul at ion Pri or t o dem and

Freight elasticity Low Low

Markets Poor/ Ri ch c ount ri es Ri ch /Ri ch c ount ri es

Share in maritime transport (2000)

Tons (est.) 70% 30%

Value (est.) 20% 80%


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Ship type selection

Lateral cargo mobility

Finance of the ship

Out of own pocket

Second hand

New building

Incomplete contract

Literal Cargo Mobility


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Shipping Document

Documents required forthe carriage of goods

Shipping Document

For your information

only

BL - 1

A bill of lading is a document which is issued by thetransportation carrier to the shipper acknowledgingthat they have received the shipment of goods andthat they have been placed on board a particularvessel which is bound for a particular destination andstates the terms in which these goods received areto be carried.


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BL - 2

Separate bills of lading are issued for theinland or domestic portion of thetransportation and the ocean or airtransportation, or a through bill of lading canbe obtained covering all modes oftransporting goods to their destination.

BL - 3

Bills of lading, whether inland or ocean, can beissued in either non-negotiable (straight) form or innegotiable form.

If the bill of lading is specified as being non-negotiable, the transportation carrier must deliver itonly to the consignee named in the bill of lading,

thus the bill of lading acts both as a receipt of goodsand as an agreement to transport these goods to aspecific destination and consignee in return forpayment of the transportation charges.

BL - 4

If the bill of lading is specifically labeled as beingnegotiable, ownership to the goods and the right tore-route the shipment are with the person who hasownership of the bill of lading properly issued ornegotiated to it.

Such bills of lading are issued to shipper's order,rather than to a specific, named consignee. Wherecollection and payment is through banking channels,such as under a letter of credit or documentarycollection, negotiable bills of lading are required(except for air shipments). The exporter mustendorse the bill of lading and deliver it to the bank inorder to receive payment.


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BL - 5

There are four types of bills of lading: inland, ocean,through, and air waybill.

Inland Bill of Lading - this is a a contract between ashipper and transportation company used whentransporting goods overland to an exporter'sinternational carrier.

BL - 6

Ocean Bill of Lading - this is a contractbetween a exporter and an internationalcarrier for transport of merchandise to aspecified foreign market overseas.

BL - 7

Through Bill of Lading - A document that establishesthe terms between a shipper and a transportationcompany covering both the domestic andinternational transport of export goods betweenspecified points for a specified charge. For example,an air shipment can be covered with a through bill oflading; however, ocean shipments require both aninland bill of lading (for domestic transport) and anocean bill of lading (for international transport).


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BL - 8

Air Waybill - An airway bill is a bill of lading whichcovers both domestic and international flightstransporting goods to a specified destination.

It establishes the terms between a shipper and an airtransportation company for the transport of goods.Included in the document are the conditions,limitations of liability, shipping instructions,description of commodity, and applicabletransportation charges.

BL - 9

In addition, the air waybill is a non-negotiabledocument which serves as a receipt for theshipper, indicating that the carrier hasaccepted the goods listed and obligates itselfto carry the consignment to the airport ofdestination according to specified conditions.

Accompanying documents


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Other documents

Manifest

Customs invoices

Certificate of origin

Shipping service

Market structure

Liner

Oligopoly market

heterogeneouscommodity

Price stable Kick demand curve

Tramp

Perfect competitionmarket

Homogeneouscommodity

Price driven by market


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Liner pricing method

Fixed price

Marginal pricing

Commodity pricing

Tramp pricing method

Flexible pricing

Pure demand and supply of capacity

Depend on type of ship and cargo

Liner Shipping


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Liner Shipping

Fixed sailing schedule

Known freight rate

Fixed itinerary

Port

A place for loading & discharging cargo

Interface between sea and land transport

Must be efficiency reduce port time

Ship and Port

Operating cost per unit is lower in larger ship Economies of scale

Larger ship

longer port time

Reduce annual productivity

Reduce revenue

Congestion at port

Penalty for larger ship . . . . unless


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Evolution

Port congestion

Linkage between ship size and cargo

Advancement of ship building

Advanced cargo handling

Bulk cargo

Palletisation

Better connections with inland facilities

Confined to hinterland

Unitisation

Advantages of palletisation

Direct sailing in tramp mode of operation

Charge on weight or volume

Accommodate various size

Hold utilisation


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Container revolution

Revolution

Why we need Containerisation ?

Congestion at ports

Diseconomies of scale

Deteriorate service level damage, pilferage

Containerisation is one type of improvementmethods used in the 40s & 50s

Pallestisation vs containerisation

How to start containerisation

Boxes

Ships

Shipping systems

Ports


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Ship toshore

Shipto rail

Ship toship

Service pattern

60 80 90 2020

Time

Evolution and Revolution in Liner shipping

Container revolution

Shorten port time, moved from port-to-port todoor-to-door delivery

Intermodal landbridge, expandedhinterland

Transhipment

Hub and spoke

Global scenario

Trade Route

End to end

Pendulum

RTW


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Trade Route End to end

A

B

Trade Route Pendulum

A

BC

D

Trade route Round The World

Capital intensive

Improve empty boxes imbalance

Will it take longer transit time ?

Shippers preferred?


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A new revolution M Stopford

Growth of sea transport

Trade matrix broaden

Trade in manufacturing sector blooming

E-commerce, cheap communications, governmentpolicy . . .

Problems

Cluster trades

Speed and reliability

All companies use big ship

Use the FedEx example

Small and urgent cargoes unattended

Conclusion

Low cost computer technology

Growth containership clearing house (cancharter any ship anytime)

Environmental issue


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Terminal operations

Space utilization

How much terminals space is occupied bycontainers

Normal calculation = stack x height

Dwell time duration the container in the

terminal area

Dwell time

Import or export containers

Container free time in terminals

Loaded or empty container why?

Transient container

Port related traffic


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Capacity measurement

Capacity

Higher ties more steps for movements

Different zones for container interchange

Higher ties expensive investment

Throughput

Crane movement

Gang time

Berth time

Terminal process all concerned parties[ship, LCL, crew ]


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Networks

Containership networks

ORIDES

Feeder and linehaul

Transhipment network

Transhipment

Location selection

Regulatory controls

Financial pollution related costs

Future trends


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Port

Port overview

Wet bulk terminal Johor port


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Port bulk terminal

Combine terminal

Relocation of port


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Port configuration

Linehaul

Feeder

Hub and spoke configuration

Selection of port

Location, location

Efficiency port productivity

Port charges

Hinterland available

Government policies

Geographic considerations

Tidal time

Port productivity


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Productivity

Outputs vs inputs

Capital

Time

Personnel

Difficult to measure

Quantify an intangible quality

Results are arguable

Need fine definition and standardisation

Measurements in port

Need for improvement

Prepare for future competition

Position in the market

Need for marketing and promotion of port

JWD - productivity

Short term Stevedoring

Gate

Intermodal

Yard productivities

Long term Overall throughput

Terminal throughput density

Berth throughput density

Container storage dwell time


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Cycle

Zero resource availabilty

Fraction of work time

See page 21

Gang time

Cannot assign more gang to increase theproductivity


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Port services

More active in marketing the port services

Port charges

Depend on port pricing policies

Cost recovery

Usage charges

Other benefits generated from port services

Overlapping service areas

Depend on government policies

Future trend - 1

Future trend - 2


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Future trend -3

Liner concentration

Liner concentration

refer to UN ECLAC

paper

Concentration

Liner companies, especially large one,cluster their services around a particularlocation

Governments promotion of port efficiency

Alliance formation

Optimal vessels deployed in the trade


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Impacts of Concentration - 1

Lower unit cost leads to lower freight rate

Disproportion return on investment due tokeen competition, company need to pass theprofit to customer

Overcapacity on certain trade lanes but notthe global situation


Freight rate fluctuation High fixed costs induce high marginal pricing. To capture

market share, in short run, company will only set to coveronly marginal costs

Alliances Unstable formation, why ?

Expansion of the trade lane from EW to NS Due to cascade effect of newly deploy large vessels

Trans-shipment volume increase Port will gain with trans-shipment services


Create trans-shipment centre

Even the port can provide good service at lowprice, it depends on its location

Segmentation of smaller liner company

Focus on a particular segment in the market

Change of government policy

Depend on the attitude of individual government


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Outlook

Concentration benefit everyone in theindustry

Extend to wide coverage spreading

Beware of the vertical integration as it mayturn into cartel operation

How about the smaller players (liner + port) ?

Small players

Liner Cooperate or focus on a particular segment of

market

Port Accept the reality and cooperate with regional

ports

Promote trade, encourage more users to use theport

Small players (contd)

Regulatory bodies Accept the trends in globalisation and

privatisation and open up the market forcompetition


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ULD

Type of ULD

Container

Air container

Pallets

Swapbodies

ISO sea container


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What type of ULD

The modes of transport

Select the right type of container based onthe commodity, loading and unloadingfacilities

inspect container for contamination

Preplan container storage, why?

Which type of ULD

Block and brace theproduct properly withinthe container


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Which type of ULD

extra attention to freighttypes

liquid in drums

loads with high centre ofgravity

off centre loads

high density loads

Hazardous Cargoes

Why it is a big concerns ?

Strict regulations

How the shippers going to beat this systems?

ISO container

International Standards Organisation

deals with standardization in all internationalfields except electrical and electronicengineering

form many technical committees


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Container - 1

One type of the UnitLoad Device (ULD)

interchangeable

handled by standardhandling equipment

promote freightmovement

Container - 2

can easily calculate the capacity and weight General 8x8x20 TEU FEU getting very popular since 60s branched out into container construction, container owning and

container leasing industries

Container operation - 1


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Container operation -2

Container seal

Container seal


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Container Size

Owner would like to use non ISO standards,why ?

Container 20 side door domestic

10 container rail operation


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Container Size

Size come from 20, 40,45, 48 and 53

also come with highcube box 96"

48 and 53

Container Types

ventilated container -condensation

bulk cargo containers


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Container Types

dry cargo containers

Dry Cargo Container

Open Top

Container


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Reefer Container

Bulk container

Bulk container - discharging


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Bulk container

Container Types

intermediate bulk container(IBC) just a large plastic bag

pallet sized and 3'-6 high

flexible and rigid two types

can be single use or

reusable what are the commoditiesthat it will carry ?

Pallets

General measure 40 inches x 48 inches

pallet base may be two or four way entry type

easily and inexpensively constructed

reusable and light-weight


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Plastic Pallet

Pallet pull & push

Paper pallet


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Swapbodies

Popular in Europe

Come in various shapes and sizes

Two types

tile unit - like a road haulage vehicle without wheels

container type - for bottom lift only and cannot stack more thanthree tiers

Common size is 7.15M

Suitable for road-rail transport

Popular in Germany, French and UK in future

Swap bodies

Swap bodies


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Container Manufacturing

Why Far East domain this industry ?

Low construction costs

Near the freight market, why?

Easy to build

Building and selling container

For warehouse, mobile office . . . . .

For one way traffic

Trade-in old container

Mainly depend on the local market, why?

Container certification -1

For customer

TIR convention

goods cannot be removed from the containerwithout breaking the seals

custom seals can be easily added and removed

no space for hidden goods

all spaces is accessible for inspection


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Container certification - 2

Protection of foodstuffs

Under the ATP (Agreement on t he International Carriage ofPerishable Foodstuffs)

Must have a temperature controlled device

Safety in handling

CSC (The International Convention for Safe Containers)requires all containers as defined and included in t heagreement to be tested, approved and periodically examinedfor the life of the container

Container certification - 3

Must carry a plate certifying that thecontainer meets all requirements

Construction and testing

Adoption of ISO requirements

Pass through the inspection fromclassification society

Container code

Why we need the code ? http://www.bic-code.org/html-gb/bic_code.html

Prefix + serial number + check digit

Country code + ISO Code


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International container bureau

Bureau International des Containers et du

Transport Intermodal (B.I.C.)

with 1200 members, is the only non-governmental organization linking all groupsinterested in containerization and intermodaltransport: carriers, manufacturers, operators,lessors, shippers, forwarders, etc

Functions of BIC

To contribute to the expansion of containerization

and intermodal transport,

To facilitate professional discussions on all subjects

connected with containers and intermodal transport,

To obtain and keep updated specialised

documentation for the benefit of its members.

For the trainer

Key words

Who control shipping ?

What types of shipping available?

How shipping interlink with port ?

How to select a port ?

Wh i h i hi i ?