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Module 13: Ocean Transportation

INTRODUCTION

Ocean Transportation

Ocean transport is a method of carrying people, goods and

etc with the means of barges, boats, ships or sailboat over

rivers, canals, oceans, or seas. The main purpose of travelby this mean is that it can be for commerce,

leisure/recreational or military purposes.

There has been very vague information about the originsof ocean transportation. It dates back to 3000 BC ago that the Egyptians employs large boats to

transport there cargo across the ocean. The Phoenicians were the first to have a system of transporting

goods by sailing vessels over the area of the Mediterranean region. Most goods transported were highvalue/quality and little volume items such as spices, perfumes, gems, and fine handmade works. Rare

items such as ivory, silver, gold and animals such as apes and peacocks were also transported.

It wasn't until late in the middle ages that transportation expanded through the oceans stretch of Spain

and Portugal. Soon followed was maritime transportation connecting water of Europe and North

America where English dominance. This lasted until World War I. Forestry of New England,

America promoted construction of sailing vessels made from wood. This made America one of the

worlds largest shipping construction country producing schooners and clippers. It wasn't until the

late 19th century that they were replaced by steel-hulled steamships. Ships powered by diesel soon

replaced steam ship. Meanwhile during the 16th and 17th century in land water transportation grew

extensively and we saw construction of canals.

The main transport use to cross waters is boats. Boats are relatively small open nautical vessel that

propels by sail, oar, by paddling or with the use of a fuel powered motor. It is common that the term

"boat" is use to describe larger vessels (ships) which is somewhat incorrect. Boats are smaller and do

carry much less people and goods. Ships are larger vessels in which people and goods may be

conveyed across water such as ocean, sea and much deeper waters.

The most common vessel that carries passengers, and sometimes their vehicles, over short distances

or small stretches of water such as rivers and lakes are "ferries". They commonly form part of many

waterside cities public transport systems which operate on a schedule time. Water taxi or water buses

like those in Venice, Italy are also very popular as they are foot-passenger ferry with many stops.

Other passenger vessels are luxury cruise ship, private boats and etc.

Large cargo ships and barges are commonly used to carry goods across water. It is usually used to

transport large items like cars, big containers and etc. Ocean transportation is a cheaper way in

transporting goods compared to air transportation.

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Module 13: Ocean Transportation

The Container

It was a logical next step that container sizes could be standardized so that they could be most

efficiently stacked and so that ships, trains, trucks and cranes at the port could be specially fitted or

built to a single size specification. This standardization would eventually apply across the global

industry.

As early as 1960, international groups already recognizing the potential of container shipping

began discussing what the standard container sizes should be. In 1961, the International Organization

for Standardization (ISO) set standard sizes. The two most important, and most commonly used sizes

even today, are the 20-foot and 40-foot lengths. The 20-foot container, referred to as a Twenty-foot

Equivalent Unit (TEU) became the industry standard reference with cargo volume and vessel

capacity now measured in TEUs. The 40-foot length container - literally 2 TEUs - became known as

the Forty-foot Equivalent Unit (FEU) and is the most frequently used container today.

History of Containerization

Modern container shipping celebrated its 50th anniversary in 2006. Almost from the first

voyage, use of this method of transport for goods grew steadily and in just five decades,

containerships would carry about 60% of the value of goods shipped via sea.

Containerization is a system of freight transport based on a range of steel intermodal containers (also

"shipping containers", "ISO containers" etc.). Containers are built to standardized dimensions, and

can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from

one mode of transport to anothercontainer ships, rail and semi-trailer truckswithout being

opened. The system, developed after World War II, led to greatly reduced transport costs, and

supported a vast increase in international trade

The idea of using some type of shipping container was not completely novel. Boxes similar to

modern containers had been used for combined rail- and horse-drawn transport in England as early as

1792. The US government used small standard-sized containers during the Second World War, which

proved a means of quickly and efficiently unloading and distributing supplies. However, in 1955,

Malcom P. McLean, a trucking entrepreneur from North Carolina, USA, bought a steamship

company with the idea of transporting entire truck trailers with their cargo still inside. He realized it

would be much simpler and quicker to have one container that could be lifted from a vehicle directly

on to a ship without first having to unload its contents.

His ideas were based on the theory that efficiency could be vastly improved through a system of

"intermodalism", in which the same container, with the same cargo, can be transported with

minimum interruption via different transport modes during its journey. Containers could be movediseamlessly between ships, trucks and trains. This would simplify the whole logistical process and,

eventually, implementing this idea led to a revolution in cargo transportation and international trade

over the next 50 years.

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Module 13: Ocean Transportation

Before Container Shipping

People have been trading with each other, even between

nations and across oceans, for thousands of years - long

before containerization. How did they do that?

For many thousands of years, mankind has shipped goodsacross the oceans, from one land to another. Think of the

great seafaring peoples; the Phoenicians, Egyptians, Greeks,

Romans, Portuguese, Spanish, British and many more. Sailing the world looking for new treasures,

they brought home and traded food, jewels and materials that their countrymen had never seen

before.

But the process was never easy. The loading and unloading of individual goods in barrels, sacks and

wooden crates from land transport to ship and back again on arrival was slow and cumbersome.

Nevertheless, this process, referred to as break-bulk shipping was the only known way to transport

goods via ship up until the second half of the 20th Century.

The loading and unloading of the ship was very labor intensive. A ship could easily spend more time

in port than at sea while dockworkers manhandled cargo into and out of tight spaces below decks.

There was also high risk of accident, loss and theft.

There were some basic systems in place to make the process more efficient, such as the use of rope

for bundling timber, sacks for carrying coffee beans, and pallets for stacking and transporting bags or

sacks. However, industrial and technological advances, such as the spread of the railways in the 18th

century, highlighted the inadequacies of the cargo shipping system. The transfer of cargo from trains

to ships and vice versa became a real problem.

Before the container shipping industry emerged, boxes of various types and sizes had often been used

in transporting cargo simply because they were the logical way to move things en masse from one

location to another. However, despite these developments, cargo handling was almost as labor-

intensive after World War II as it had been in the mid-1800s.

The Birth of "Intermodalism"

Intermodalism is a system that is based on the theory that efficiency will be vastly improved

when the same container, with the same cargo, can be transported with minimum interruption via

different transport modes from an initial place of receipt to a final delivery point many kilometers or

miles away. That means the containers would move seamlessly between ships, trucks and trains. To

realize intermodal cargo transport, all areas of the transport chain had to been integrated. It was not

simply a question of putting cargo in containers. The ships, port terminals, trucks and trains had to

been adapted to handle the containers.

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The Containership

On 26 April 1956, Malcom McLean's converted

World War II tanker, the Ideal X, made its maiden voyage

from Port Newark to Houston in the USA. It had a reinforced

deck carrying 58 metal container boxes as well as 15,000

tons of bulk petroleum. By the time the container ship docked

at the Port of Houston six days later the company was already

taking orders to ship goods back to Port Newark in

containers. McLean's enterprise later became known as Sea-

Land Services, a company whose ships carried cargo-laden

truck trailers between Northern and Southern ports in the USA.

Other companies soon turned to this approach. Two years later, Matson Navigation Company's ship

Hawaiian Merchant began container shipping in the Pacific, carrying 20 containers from Alameda

to Honolulu. In 1960, Matson Navigation Company completed construction of the Hawaiian

Citizen, the Pacific's first full container ship. Meanwhile, the first ship specifically designed for

transporting containers, Sea-Land's Gateway City, made its maiden voyage on 4 October 1957 from

Port Newark to Miami, starting a regular journey between Port Newark, Miami, Houston and

Tampa. It required only two gangs of dockworkers to load and unload, and could move cargo at the

rate of 264 tons an hour. Shortly afterwards, the Santa Eliana, operated by Grace Line, became the

first fully containerized ship to enter foreign trade when she set sail for Venezuela in January 1960.

The Classification of Containers

Full Container Load (FCL)A Full Container Load (FCL) is an ISO standard container that is loaded and unloaded under the risk

and account of one shipper and only one consignee, in practice it means that the whole container is

intended for one consignee. FCL container shipment attracts lower freight rates than an equivalent

weight of cargo in bulk. Ideally FCL means the container is loaded to its allowable maximum weight

or volume. In practice, the FCL in the ocean freight does not always mean packing a container to its

full payload or full capacity.

Less Container Load (LCL)Less than container load (LCL) is a shipment that is not large enough to fill a standard cargo

container. The abbreviation LCL formerly applied to "Less than (railway) Car Load" for quantities of

material from different shippers or for delivery to different destinations which might be carried in a

single railway car for efficiency. LCL freight was often sorted and redistributed into different railway

cars at intermediate railway terminals en-route to the final destination. Less Than Carload or Less

Than Container Load is a quantity of cargo less than that required for the application of a carload

rate. A quantity of cargo less than that fills the visible or rated capacity of an inter-modal container. It

can also be defined as "a consignment of cargo which is inefficient to fill a shipping container.

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Other Types of Container Units and Designs for Shipping Cargo

As such, depending on the type of products to be shipped or the special services needed from them,

container units may vary in dimension, structure, materials, construction etc. various types of

shipping containers are being used today to meet requirements of all kinds of cargo shipping. Some

of the most common types of shipping containers in use today are mentioned below.

1. Dry storage containerThe most commonly used shipping containers; they come in various dimensions

standardized by ISO. They are used for shipping of dry materials and come in size of 20ft, 40 ftand 10ft.

2. Flat rack containerWith collapsible sides, these are like simple storage shipping containers where sides

can be folded so as to make a flat rack for shipping of wide variety of goods.

3. Open top container

With a convertible top that can be completely removed to make an open top so thatmaterials of any height can be shipped easily.

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4. Tunnel containerContainer storage units provided with doors on both ends of the container, they are

extremely helpful in quick , loading and unloading of materials.

5. Open side storage containerThese storage units are provided with doors that can change into completely open sides

providing a much wider room for loading of materials.

6. Double doors containerThey are kind of storage units that are provided with double doors, making a wider room for

loading and unloading of materials. Construction materials include steel, iron etc in standardizedsizes of 20ft and 40ft.

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Module 13: Ocean Transportation

7. Refrigerated ISO containersThese are temperature regulated shipping containers that always have a carefully

controlled low temperature. They are exclusively used for shipment of perishable substances likefruits and vegetables over long distances.

8. Insulated or thermal containersThese are the shipping storage containers that come with a regulated temperature control

allowing them to maintain a higher temperature. The choice of material is so done to allow them longlife without being damaged by constant exposure to high temperature. They are most suitable for long

distance transportation of products.

9. TanksContainer storage units used mostly for transportation of liquid materials, they are used

by a huge proportion of entire shipping industry. They are mostly made of strong steel or other anticorrosive materials providing them with long life and protection to the materials.

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10. Cargo storage roll container

A foldable container, this is one of the specialized container units made for purpose of

transporting sets or stacks of materials. They are made of thick and strong wire mesh along withrollers that allows their easy movement. Availability in a range of colored wire meshes make

theseshipping container units a little more cheerful.

11. Half height containers

Another kind of shipping containers includes half height containers. Made mostly of steel,these containers are half the height of full sized containers. Used especially for good like coal, stones

etc which need easy loading and unloading.

12. Car carriersCar carriers are container storage units made especially for shipment of cars over long

distances. They come with collapsible sides that help a car fit snugly inside the containers without the

risk of being damaged or moving from the spot.

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13. Intermediate bulk shift containersThese are specialized storage shipping containers made solely for the purpose of

intermediate shipping of goods. They are designed to handle large amounts of materials and made forpurpose of shipping materials to a destination where they can be further packed and sent off to final

spot.

14. Drums

As the name suggests, circular shipping containers, made from a choice of materials likesteel, light weight metals, fiber, hard plastic etc. they are most suitable for bulk transport of liquid

materials. They are smaller in size but due to their shape, may need extra space.

15. Special purpose container

Not the ordinary containers, these are the container units, custom made for specializedpurposes. Mostly, they are used for high profile services like shipment of weapons and arson. As

such, their construction and material composition depends on the special purpose they need to cater

to. But in most cases, security remains the top priority.

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16. Swap bodiesThey are a special kind of containers used mostly in Europe. Not made according to the ISO

standards, they are not standardized shipping container units but extremely useful all the same. Theyare provided with a strong bottom and a convertible top making them suitable for shipping of many

types of products.

The Impact of Containerization in Global Trade

o Impact on Port LaborThe impact of expanded use of containers was immediately felt by port workers; with the

speed efficiencies in loading/unloading meaning fewer workers were required. Studies found that the

amount of goods per worker that could be loaded or unloaded with containers, as compared to break

bulk, was so much higher as to make nineteen in every twenty men redundant, as Broeze (235 -236)

puts it.

These changes were naturally met with misgivings by workers and their unions, resulting in

major struggles between labors and shipping companies that lasted into the 1980s. The ultimate result

was tremendous drops in the number of dock workers with examples being the number of

registered longshoremen on the U.S. East Coast falling by over two-thirds from 1952 to 1972, and the

number of dock workers in the United Kingdom falling from over 70,000 to under 10,000 between

the early 1960s and the late 1980s (Broeze 237-238). These changes occurred in spite of worldwide

shipping increasing more than 600% from 1950 to 1973 (Brookfield 63).

o Impact on Other Technology and Business PracticesThe nature of dockside labor changed as well, with container operations demanding more

technical skills in operating heavy machinery. Standardization of container size and handling

attachments meant that the same cargo handling equipment could be used for a huge variety of goods.

Moreover, ships could be designed from the start to carry containers. Uncertainty in shipping was

also reduced it was easier for a shipping company to calculate the speed of loading or unloading

containers than for a similar quantity of mixed goods.

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These advances resulted in further increased investment in ships and shipping companies in

the 1970s (Broeze 72-76) and the of creation ever-larger container ships as efficiencies of scale - 5 -

of big ships, which would be loaded and unloaded rapidly, became evident. As the scale of

operations of shipping companies grew, they pursued further integration with land transportation

o Impact on Ports and CitiesAdvances in lowered costs of labor, faster loading/unloading, and increased ship size occurred

in parallel with changes in ports themselves. Larger ships required deeper water. But more

importantly, containerized trade required more space. Containers are their own storage, so

warehouses were not needed at portside. Instead space was needed for the containers themselves and

also for the additional volume of trade that lowered shipping costs allowed. In many places, this

resulted in shifting of port operations from near city centers to less developed locations.

In many cases, the scale of container shipping led to, or at least highlighted, the value of

regional cooperation. In California, competition between the ports of Los Angeles and Long Beach

for container traffic gave way to more coordination between them in the 1980s (Erie 88-93). In thegreater New York City area, the Port Authority of New York and New Jersey has played a key role in

such regional coordination.

Containerization has contributed to changes in the location of industry and labor within

regions as well. The advantage of export manufacturing taking place dockside disappeared as low-- 6

-cost intermodal transportation became available. Instead, manufacturing could spread out regionally

into the facilities designed to allow easy access for trucks carrying containers, rather than built up

along the waterfront. Such changes were dramatic in New York City, for example, with

manufacturing in the city dropping precipitously while container shipping to and from inland

locations was booming in New Jersey.

o Global Impact and Future DirectionsBut the most profound impact of the container is on the global economy as a whole.

Worldwide, by the early 2000s, 300 million 20-foot containers were moved by sea each year, with

over a quarter of those shipments coming from China (Levinson 277). As Slack (25)puts it:

Globalization and container shipping enjoy a reciprocal relationship. There is little doubt that the

expansion of international commerce and the expansion of global manufacturing systems would have

been impossible without the efficiencies and economies that containerization has brought. Container

shipping is a facilitator of globalization.

Globalization is rightfully the subject of much debate. We have seen how containers have

reduced employment at individual ports. Beyond that, globalization has resulted in shifting of

employment among cities, regions and countries. It has also lowered costs to consumers and enabled

delivery of a much wider varieties of goods to many markets. Globalization has affected not only

economies but the environment, politics, and culture. The shipping container, a simple technology

intended to speed the loading/unloading of goods, has played an important part in those changes.

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Module 13: Ocean Transportation

Advantages and Challenges of Containerization

Factors Advantages

Standard Transport Product Can be manipulated anywhere in the world

(ISO standard).

Specialized ships, trucks and wagons.Flexibility Usage Commodities (coal, wheat), manufactured

goods, cars, frozen products.Liquids (oil and chemical products) and

Reefers (50% of all refrigerated cargo).

Reuse of discarded containers.

Management Unique identification number and a size typecode.

Transport management not in terms of loads,but in terms of units.

Costs Low transport costs; 20 times less than bulk

transport.Speed Transshipment operations are minimal and

rapid.

Port turnaround times reduced from 3 weeks

to about 24 hours.Containerships are faster than regular

freighter ships.

Warehousing Its own warehouse; Simpler and less expensivepackaging.

Stacking capacity on ships, trains (doublestacking) and on the ground.

Security A content of the container is unknown toshippers.

Can only be opened at the origin, at customs

and at the destination.Reduced spoilage and losses (theft).

Factors Challenges

Site constraints Large consumption of terminal

space; move to urban periphery.

Draft issues with larger

containerships.Infrastrature Cost Container handling infrastructures

(giant cranes, warehousing facilities,inland road, rail access), are

important investments.

Stacking Complexity of arrangement of

containers, both on the ground and

on modes (containerships anddouble-stack trains).

Restacking difficult to avoid.

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Module 13: Ocean Transportation

Theft and Losses Issues between terminal and final

destination.

10,000 containers are lost at sea eachyear.

Empty Movements Many containers are moved empty

(20% of all flows).

Either full or empty, a containertakes the same amount of space.

Divergence between production and

consumption; repositioning.

Illicit Trade Common instrument used in the

illicit trade of drug and weapons, as

well as for illegal immigration.

Worries about the usage ofcontainers for terrorism.

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LOGISTICS MANAGEMENT(MODULAR APPROACH)

MODULE 13:

OCEAN TRANSPORTATION

(WRITTEN REPORT)

SUBMITTED BY:

LEADER:RECHELLE M. NABAS

MEMBERS:LORRAINE M. LIM

GERALD ANDREW MANALILI

DAVID P. DANAO

SECTION:(HRDM 4-2N)

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