Cargo handling productivity. Part 2. The findings

This is the second of two papers on cargo handling productivity presenting the results of the model developed int he first [1] which had been designed to test a productivity measurement method with cross-sectional empirical data. Four productivity measures were employed. Two related cargo handling to time, with labour brought into the analysis as an independent variable. The third productivity measure expressed total throughput as an aspect of labour productivity, while the final measure was a full productivity index developed by relating output to both capital and labour.

The productivity measurement technique demonstrated that this method can be used for cross-sectional studies and can cope with and allow for variation in non-controllable extraneous factors, thus proving useful for policy decision-makers in shipping lines and/or port authorities.

This paper presents the results of the prodictivity analysis for which the analytical design was decribed in Part 1. The first section briefly restates the productivity indices developed. The principal results and tests on these measures are present in Section 2 with conclusion following in Section 3.     

Job satisfaction and personality of Merchant Navy officers

Until recently little research had been carried out into job satisfaction of seafarers. Wastage in the shipping industry is higher than most other industries and although some improvements have been made to working conditions and facilities the wastage is still very high.

During the last two decades shipping technology has changed drastically, necessitated by changing economic factors, resulting in the need for highly trained personnel. Training costs are high, particularly for officers, and could be reduced if efficient selection processes were employed.

The project is designed to study perceived and implied (calculated) job satisfaction of officers who have served in the Merchant Navy for five years or more. Gone are the days of high port-time/sea-time ratios due to increased port and labour costs. Consequently seafarers may be confined together for longer periods at sea such that a different type of personality may be required to survive the stresses and strains of such a way of life. The project also attempted to discover whether the personalitics of the seafaring officers differ from those of the shoreside population and whether personality is related to job satisfaction at sea.

The project took the form of a survey by applying a questionnaire to Merchant Navy deck, engineer and radio officers at nautical educational establishments between September and October 1978.

The results showed that the majority of officers have a moderately high level of perceived job satisfaction whereas implied satisfaction was comparatively low. The personality of officers was found to be significantly different from that of the shoreside population in almost 50% of the 31 personality scales measured. There were also found to be differences between the personalities of deck and engineer officers.

A correlational study indicated that the personality of the Merchant Navy officer is related to overall job satisfaction.     

The impact of port choice on inland transportation

The Belgian government intends to shift part of its funding away from Antwerp and towards other seaports, particularly Ghent and Zeebrugge. In the long run, this policy change will undoubtedly influence the port choice and probably cause a traffic diversion at the expense of Antwerp. This will have a great influence on the structure of inland transportation.

The impact of port choice on inland transportation is the central theme of this paper. To this end a disaggregated model of the demand for freight transport is constructed.     

On the beaten track: a view of US West-Coast container port competition

More than a century ago far-sighted railroad builders and steamship operators were seeking the shortest intermodal itineraries between the eastern United States and the Orient. A combination of locational fact and the factual outcomes of 19th century railroad building left Chicago roughly equidistant in railway mileage from what became the four great US West-Coast port complexes in the Los Angeles, San Francisco, Portland and Seattle regions. Their nearly equivalent rail access to Chicago and points east has renewed significance in the container era.

This paper concerns the efforts of US Pacific seaboard ports to stay 'on the beaten track' with respect to container shipments between Asia and the eastern United States. The West-Coast ports are transit points dividing the transcontinental and transoceanic segments of long intercontinental journeys. From origins to destinations there are, in fact, many possibly feasible itineraries, including all-water routes.

The West-Coast ports have considerable control over their own site improvements. On the other hand, with respect to transiting container traffic, the ports may influence, but are unlikely to control, their own situations. Since the major container port facilities are very often on long-term lease to large intermodal carriers, the latter are making the important shipping and routeing decisions. The carriers tend in fact to set the tone and level of port competition.

What is the nature of the competition between container ports? Is it a figment of the publicist's imagination and perpetuated by irrelevant statistical boasting? Is it perhaps something forced on the ports by carriers eager to play one port off against another in a 'lowest bid' game? At what geographical scale might port competition be most useful or, maybe, least wasteful?     

Contributions to maritime economics—Zenon S. Zannetos, the theory of oil tankship rates

This paper discusses the importance of Zannetos' 1966 book for the development of maritime economic thought. The main contributions of the book are recounted, and the empirical work in the book is reviewed.

The analysis of the present paper is a citation research on the maritime economics literature that refers to the book. Of the 42 papers in the set, about one-third refers to the book in general. A total of 35 papers refer to one or more elements of the book, with an equal number of references to: (1) the term structure of freight rates; (2) the empirical findings on the form of the supply curve; and (3) on the verification of his results.

The general conclusion of the citation analysis is that, apparently, a number of elements of his work are still very valid for current maritime economics thinking, while maritime economists have disregarded several other elements. The latter seems unjustified for some of the business structure observations that are made in the book, such as the notion that the ship is the firm, and the elasticity of expectations. The former observation is the basis for virtually all empirical work in maritime economics that is based on individual contract data (all freight rate analysis is of this nature), and the second is the basis for the analysis of investment behaviour in shipping, investigations of cyclicality and so on.

Zannetos can definitely be seen as the initiator of the important field of term structure analysis in maritime economics. In addition to this, there are several topics in the 1966 book that are as yet unexplored, and deserve empirical scrutiny.     

The bulk shipping business: market cycles and shipowners' biases

Despite a strong linkage with the macro-economic course, the bulk shipping market, in the short period, follows a typical cyclic pattern, where continuous freight adjustments balance demand and supply movements.

In this context—widely unstable but quite regular in its general scheme—the shipowners may have enough competencies and information to take logical and consistent decisions about ship purchasing and chartering.

Yet, why do they periodically make mistakes?

The analysis of shipowners' behaviour provides a reasonable answer: mistakes incur when they ignore or undervalue the market trends, following their personal intuition or even unwisely imitating their competitors.

The analysis of the Handysize segment among the bulk shipping business offers a significant example of the lack of timeliness in shipowners' behaviour: after a long period of disregard, operators began to notice the opportunities of this market niche and they are now heavily investing in minor units. Maybe it's not too late, but the market has already changed and only a few brave—or lucky—shipowners took advantage of the magic moment.     

Sustainability and national policy in UK port development

Given the private sector character of the UK port system it might well be thought that, so far as port development is concerned, the market ruled. There are of course permissions to be obtained, including planning consent under the Town and Country Planning Acts; but this process has not so far been considered to interfere with market function. Ports are already well used to the process of obtaining approval, to negotiations with objectors and environmental interests, and to mitigating the effects of development when defining projects and seeking approval.

However, as ports policy is being brought into line with transport policy generally, and in particular with Government policy for sustainable development, ports are being faced with a more challenging regulatory framework. The search for sustainable transport is leading Government towards a broader based approach to the approval of development applications in which market need and commercial viability are simply two of a number of considerations which ports must take into account in designing projects which also meet environmental concerns.

There has been a long standing requirement for developers of major projects to carry out Environmental Impact Assessments. In addition Government policy is set out in a number of publications, applying sustainability and the associated “New Approach to Transport Assessment” (NATA) to the ports sector. In a separate and broader initiative it has also considered a radical reform of the planning system and the establishment of national priorities for infrastructure combined with a simplification of the Public Inquiry process. In the event it has been decided not to establish national priorities in the ports sector, although the aim of simplification of the Inquiry process remains.

The aim of this paper is to explore the emerging theoretical and practical issues arising within the development approval process. These are of most concern in the development of major projects for cargoes which have broad hinterlands, and where there are competing locations for new facilities. The most important example of this is in the deep sea container sector where there is a demand for new capacity and a choice of widely spaced locations in the south east of the UK. Some comment will be made on this sector and on the issues arising at the Public Inquiries for the proposed container port developments at Dibden Bay (Southampton) and the London Gateway at Shellhaven on the north bank of the Thames.     

The impact of US regularory practices on the productivity of ocean liner services?

This United States stands alone amongst the nations of the world in its attempt to unilaterally regulate transnational ocean linear services. The major reason for current US regularity policies with regard to scheduled ocean transportation lies in its fundamental distruct of any form of co-operation amongst competitors as demonstrated by its history of antitrust legislation.

The linear industry, because of its unique technical and economic charectersitics has given rise to the establishment of ocean conferences—co ordinating sgreements between the operators of linear vessels. Whilst ocean conferences are permitted—even encouraged—by the their most diluted form, the so-called 'open conferences.

This Paper offers a critical review of Successive US regulatory practices in maritime transport. It is argued that these practices result in excess costs in US trades to the order of $1 billion annually, and that the linear industry's efficient functioning is seriously impaired by these rules-rules imposed by a government administration which fails to recognize that the linear industry's technical efficiency is of far greater importance than its market performance.     

A model for forecasting future supply of shipping services at Australian ports

This paper aims to develop an integrated model for forecasting both the number of ship visits and their characteristics in the medium and long term. Knowledge of future shipping trends for any port is no doubt important, as the future number of ship visits and their characteristics may have implications for the physical facilities of a port. In addition, more reliance on tonnages as a revenue source has made this knowledge more valuable. The proposed model identifies such major economic determinants as the expected trade throughput, world shipping trends, standards of facilities and future plans of shipping companies/agents. The model examines three possible scenarios for the Port of Melbourne and produces a range of shipping forecasts based on certain assumptions. From the model the major findings were:

world trends in shipping did not have any immediate impact on the shipping trends at the Port of Melbourne;

Future shipping services at the Port of Melbourne in the next 11 years are most likely to be determined by trade demand rather than by technological developments overseas;

there has been no evidence to indicate that the Port of Melbourne has been excluded from the schedule of general cargo ships due to the Port's physical constraints.     

Effective corporatization of ports is a function of effective legislation: legal issues in the existing paradigm

Almost a decade since port corporatization was introduced in Australia it is becoming clear that initial objectives are not being realized. This paper explores some of the legal and legislative causes, the effect on port operation and investigates what necessary conditions are required to deliver an effective corporatized port business. The paper argues that effective corporatization is a product of effective legislation—one which, while emulating private sector business practices—can deliver a business model that is innovative, entrepreneurial, commercially oriented and free from self-serving political constraints.

The legislation and corporatized artifacts in Australian mainland ports have failed, in general, to deliver this. Arguably, the legislation has, in fact, created a model with inherent flaws and serious contradictions. The legislation enacted is such that while it has set in place a model that articulates commercial objectives, the model created is in fact one in which political objectives may override commercial ones; where strategy may be determined by a bureaucratic elite without the requisite skills and insights, and the resultant strategy appears ad hoc; and a corporate culture that frequently has failed to transcend that of the statutory authority and public utility model. This paper will test these assertions against the developments in the port of Melbourne.     

Competition for transhipment containers by major ports in Southeast Asia: slot capacity analysis

Container ports in Southeast Asia accounted for an estimated 30.0% of the world's transhipment traffic in 2004. The share of the region's transhipment trade was forecasted to increase to 32.5% in 2015. The potential offered by this large and expanding market encouraged major container terminal operators located in Port Klang, Singapore and Tanjung Pelepas to compete intensively for this business by attracting major container shipping lines that operated along key east-west sailing routes to hub at their terminals.

This paper analyses the annual slot capacity connected to the three selected ports that was deployed by all the container shipping lines in 1999-2004. The data are computed and categorized based on shipping trade routes. The study aims to shed light on port competition in Southeast Asia for transhipment containers by an in-depth and quantitative analysis.

The analysis finds that competition from Port Klang and Tanjung Pelepas had a negative impact on Singapore's transhipment performance. Although Singapore continued to enjoy a dominant position as the premier transhipment hub in the region in terms of market share by both transhipment throughput and annualized slot capacity, the evidence suggested that its hold on the market appeared to be slipping, albeit gradually. Overall, Tanjung Pelepas is expected to pose the strongest challenge to Singapore's transhipment hub ambitions. Managerial implications for the ports are drawn.     

Currency adjustment factors: some alternative strategies

The purpose of this paper is to consider some of the issues arising from currency fluctuations or currency disparities and in particular their effects upon freight earnings through the application of a currency adjustment factor (CAF).

The operation of CAFs has been a source of great concern to shippers and shipper's councils since their introduction some seven years ago. The basis of this concern has been the widening differential of applicable CAFs as a surcharge on basic freight rates. The CAF system has been regarded by many as iniquitous and punitive. Conferences have been accused of insulating themselves from currency losses due to exchange-rate variability consequent upon the introduction of flexible exchange rates in 1971. However, this mounting pressure has brought the operation of the CAF formula under close scrutiny especially from four sources.

(a) Some member Councils of the European Shippers' Council (ESC).

(b) The Japanese Shippers' Council (JSC).

(c) The question of the legality of differential CAFs under the Treaty of Rome

(d) Complaints from North Continental Maltsters.     

Data processing and telematic work and projects in Western Mediterranean ports

This report which is the object of this summary is the result of Western Mediterranean cooperation both in origin and in execution, during which interviews with over 100 people working in port areas in seven countries were carried out. This has led to a working group involving several professions to promote data processing and electronic data interchange in transport within the area.

CETMO which takes part in these cooperative tasks as an international centre of the United Nations, has drawn up the report. The aim is to provide the group of interested companies and institutions with data on the realities, projects or intentions to develop data processing and telematic systems in the ports of Algiers, Barcelona, Casablanca, Genoa, Lisbon, Marseilles, Tunis and Valencia.

The report presents the results seen from the point of view of the user; the transport operator. Emphasis is therefore placed on system functions and on organizational aspects in order to point out the leaders in port computerization and also the obstacles encountered. The data collected refer to the last nine months of 1988.     

US shipping policy under conditions of a new world economic and political environment

The maritime policy of the US has evolved over more than 100 years from the support of US shipping through mail and fleet auxiliary contracts before the turn of the century, to the present array of direct and indirect Government aids and regulations based on the assumption that a strong maritime industry composed of both US-flag shipping and US-shipbuilding capacity is essential for the economic well-being and defence of the country. Notwithstanding massive direct and indirect aid to the US merchant marine, amounting to well over a billion dollars a year in recent years, US shipping and shipbuilding has declined dramatically and now comprises less than 3% of world shipping. Only 2.8% of US foreign trade by volume and 6% by value is today carried in US flag ships. Government aids constitute well over 33% of total revenues of US-flag shipping.

The traditional argument for US Government support has been the need for cost parity to permit US-flag shipping to compete effectively in international trade against foreign shipping serving the same routes with presumably lower operating costs. This argument is difficult to sustain today, as vessel costs of many other industrialized nations are now about equal to those of US-flag ships.

In 1970 the US enacted a new, vastly more liberal, maritime act for the support of the US maritime industry. Notwithstanding its even more liberal terms and elimination of the strict cost-parity interpretation, the US maritime industry continues its decline. The recent bankruptcy of two old, established subsidized shipping companies has caused tremors in the industry, yet no new ideas, policies, or plans seem to be forthcoming. It is the objective of this paper to study the development and effects of various historic US Government policies relating to the support of the US maritime industry, and evaluate the positions taken by proponents or opponents of the maritime policy leading to the policy development.

The decision processes are studied by evaluating literature on the evolution of Congressional, administration, industry, and labour interest and positions on the issue of Government aid to the maritime industry. The impact and effectiveness of various elements of past and present US maritime policy is evaluated in relation to the stated objectives. The alternatives to these policies are reviewed in the light of the changing US position in international trade, military strategy, and political objectives. In addition the effectiveness of the present and alternative policies is evaluated as it is and will be affected by changing technology in use, composition of ownership, and operations of US-flag shipping and shipbuilding.     

The effects of marine cargo delays in law and commerce

With the development of door-to-door intermodal services and the advent of just-in-time supply systems, punctual delivery of cargoes is more than ever a priority both for shippers and for shipowners. This paper is about the incidence of delay in transportation, particularly in the marine mode, and its legal and commercial consequences.

The fundamental legal obligations of marine carriers have always included delivery with dispatch. Thus the law would seem to support the commercial expectations of shippers for reliable performance. The authors discuss the nature of these obligations, investigate their adequacy under modern conditions of trade and report on a survey of Canadian shippers and consignees.

The authors conclude that there appears to be a divergence in the toleration of delay, but that few of the Canadian companies suffering unacceptable delays received, or even sought, financial compensation and none of them planned to do more. The authors speculate about their reasons for absorbing the losses incurred through unacceptable delays. The evidence from the survey is that shippers, in spite of their dissatisfaction with the resolution or outcome of incidents of unacceptable delay, are loath to seek compensation through legal means, but instead prefer to resort to a range of commercial actions.     

Economic policies and seaports: The diversity of port policies

This paper contrasts the economic policies adopted towards seaports by different countries in terms of their approaches to national, regional or local control. Various examples are presented and described, together with some of the difficulties that have been encountered. Examples are cited where national, regional and local governments have become involved, even though constitutional provisions appeared to present this. It is argued that national, regional and local governments all have interests in the efficiency of ports from various points of view; hence all should be involved. The arguments for and difficulties experienced in centralized planning and co-ordination are also discussed.

The variety of activities directly undertaken by port authorities is discussed, with the extreme positions labelled 'landlord' and 'comprehensive'. The remarkable variety of intermediate positions is also described. Whilst oversimplification is dangerous, the opportunities for expanding the private sector are analysed, even to the extent of wondering whether public sector port authorities are needed at all. This, therefore is the subject of the next paper.     

The changing role of ports in supply-chain management: an empirical analysis

As integrated supply-chain management (SCM) is now at the epicentre of business transformation, firms are breaking down boundaries between internal functions, as well as between the enterprise itself and key partners in the value chain (e.g. customers, distributors, suppliers and carriers). One of the main goals of such new management approach is to get everyone in the supply chain into a common platform of logistics transactions and information systems.

Against such background, the aim of this work is to analyse how and if port operators can face the challenge of higher integration, on the assumption that the higher the integration between the actors the higher the competitiveness of the whole supply chain.

Accordingly, we adopted an SCM approach in the analysis of the port of Le Havre in Renault's supply chain. More specifically, we referred to the Lambert tri-dimensional model based on supply chain's structure (actors), key business processes and links between actors. The field work—which mainly consisted of semi-structured interviews to Renault, logistics and port operators, and, finally, to the Le Havre Port Authority—was crucial to gather the needed information.     

Some current aspects of marketing in the near-sea ferry and liner trades with particular reference to the lrish Sea

The marketing of ferry services has almost unique characteristics but little literature exists in this field. This paper is the result of a preliminary investigation, based on a series of interviews, into some current aspects of marketing on the Irish Sea. The study considers three services types: container; freight only; ro-ro and multi-purpose ro-ro.

The complementarity, or otherwise, of carrying passengers and freight together is debated, as is the organizational conflict or confusion that may arise from this type of operation. The need to adopt different marketing strategies in the freight and passenger markets is derived from consumers' different buying behaviours. The sometimes contentious relationship between product differentiation and market segmentation strategies is explored and definitions provided. Both market coverage and specialization strategies are found in the ro-ro industries and the more competitive segments are identified. Using 'purpose of travel' as the basis for segmentation, potential growth segments of the passenger market are identified. The marketing strategies employed by the freight industry are less apparent, although segmentation does seem to play a major role in the identification of target markets.

The study indicates the extent to which shipping companies on the Irish Sea have adopted the marketing concept and that scope still exists for them to make greater use of this fundamental business philosophy.     

Currency adjustment factors

The manner in which CAFs have been applied to cargo carried by lines appears to be both arbitrary and secretive. This note intends to give some clarification as to how the CAF is calculated and the manner in which it is applied.

The operation of the two methods, i.e. the monthly review and the radical review, is merely a device which enables conferences to adjust effective charges so as to leave lines without a loss in real revenue, although minor losses and gains will be inevitable as the operation of the CAFs take time to be implemented.

Finally it is hoped to point out the volatilc nature of CAF changes impinges upon the uncertainty of lines' costs.