Case study analysis of the impacts of electronic commerce on the strategic management of container shipping companies

Despite the prevalence of its use, very little is understood about the role of electronic commerce (EC) practice on the strategic management of container shipping companies. Four case studies were undertaken to assess the main uses, motivations, barriers and strategic relevance of EC in the container shipping industry between 1992 and 2002. The cases studies included one large, one medium and one small deep-sea container line, and one medium-sized feeder line. The research found that despite pressing technical and managerial barriers, the need to improve internal economies provided the most fertile grounds for EC use in 1992 and EC was seen as a tactical tool to achieve these goals. By 2002, customer-oriented motivations became critical to the increased relevance of EC and to its perception as a business necessity.     

国际集装箱运输市场回顾与展望

对2001年国际集装箱运输市场的发展特点进行了回顾、总结,并根据世界经济、贸易发展的变化趋势,预测分析了2002年国际集装箱运输市场及我国集装箱运输市场的发展前景。     

Weekly container delivery patterns in liner shipping planning models

This paper addresses a fundamental question related to nearly all container liner shipping planning models: whether the implicit assumption of identical container delivery pattern every week is valid in a situation of identical shipping services and identical cargo demand every week. We prove that when the number of containers transported from one port to the next is formulated as a continuous variable, the resulting mathematical model with an identical container delivery pattern is equivalent to the model with general container delivery patterns which can be different in different weeks. When the number of containers transported is formulated as an integer variable, the model with an identical container delivery pattern is not equivalent to the model with general container delivery patterns. However, the difference between the optimal objective values of the two models is negligible for practical applications. In sum, little, if not nothing, is lost by assuming an identical container delivery pattern in liner shipping planning models.     

集装箱运输市场回顾及展望

对2002年集装箱航运市场走势的特点进行了回顾和总结;结合世界政治与经济形势,对2003年国内、国际集装箱市场的发展进行了总体预测和分析。     

Scenario analysis for supply chain integration in container shipping

Competition in the business world nowadays is largely between supply chains, rather than individual players only. The same situation exists in container shipping. The study looks into container shipping from an integrated perspective and investigates the nature and level of supply chain integration in container shipping. Based on empirical examinations of the world's top 30 container shipping lines, a scenario analysis is conducted. The paper aims to present the scenario analysis for examining supply chain integration in container shipping. It also aims to formulate strategic recommendations for liners to create and sustain competitive advantage. The scenario analysis is designed to allow more complete consideration of alternative possible outcomes and their implications on the research topic. It involves an evaluation of past and present events and provides a plausible discussion of what might occur in the future. It depicts four scenarios of supply chain integration in container shipping, namely, low integration, partner-focused integration, activity-focused integration and high integration. On the whole, research findings suggest that market situations favour those scenarios representing higher level of supply chain integration. Importantly, with reference to the scenario analysis, shipping lines should position themselves in an appropriate scenario and formulate strategic plans accordingly.     

Liner alliances in the globalization era: a strategic tool for Asian container carriers

There has been an increased interest recently in alliances as successors of the large consortia that used to operate in the context of the conference system. Today, having become a common means and term of co-operation in a variety of other industries, alliances are posited as the response of the supply side of liner shipping to important changes on the demand side; alliances have, thus, become predominant in the most important routes for container cargoes. In recent years, however, the list of major container traffic generators and the list of major carriers of containerized cargoes have begun to contain more common entries, generally originating from the Asian region. Asia is, however, a large continent and the entrance of Asian carriers into liner shipping has not been simultaneous; the position, strategies and co-operation strategies of Asian companies have more differences than they share common features. Nevertheless, this paper suggests that alliances are a distinct form of co-operation in liner shipping and the empirical evidence based on a survey in the region supports this hypothesis. The similarity of attitudes of the major Asian container carriers vis a vis alliances is in this way revealing in terms of the range of motivations for participating in the alliance system in a globalized transport environment.     

Strategic fleet size planning for maritime refrigerated containers

In the present economic climate, it is often the case that profits can only be improved, or for that matter maintained, by improving efficiency and cutting costs. This is particularly notorious in the shipping business, where it has been seen that the competition is getting tougher among carriers, thus alliances and partnerships are resulting for cost effective services in recent years. In this scenario, effective planning methods are important not only for strategic but also operating tasks, covering their entire transportation systems. Container fleet size planning is an important part of the strategy of any shipping line. This paper addresses the problem of fleet size planning for refrigerated containers, to achieve cost-effective services in a competitive maritime shipping market. An analytical model is first discussed to determine the optimal size of an own dry container fleet. Then, this is extended for an own refrigerated container fleet, which is the case when an extremely unbalanced trade represents one of the major investment decisions to be taken by liner operators. Next, a simulation model is developed for fleet sizing in a more practical situation and, by using this, various scenarios are analysed to determine the most convenient composition of refrigerated fleet between own and leased containers for the transpacific cargo trade.     

Analysis of container port policy by the reaction of an equilibrium shipping market

In the competitive container cargo transportation market, shipping companies are drastically changing their strategy vis-a-vis routing and port choice by the formation of global alliances. In such a situation, the effectiveness of port management policy in persuading container liners to use the port is most important. The paper discusses port management policy in an equilibrium shipping market. A model is proposed to simulate the flow of foreign trade container cargo using game theory. It is used to explain the interaction of port management policy, shipping companies and shippers.     

Korean liner shipping in the era of global alliances

In the course of the last two decades Korean shipping has emerged as a major player in the liner market. In 1970 there was not a single container ship in the Korean fleet; yet, within the next two decades, shipping companies from Korea have become included among the top 10 liner operators in the world, in the context of a spectacular ascent of Asian companies in international container shipping. During the same period the organization of liner shipping itself underwent major changes. In the 1970s and 1980s, pools and powerful consortia prevailed, maximizing frequency and optimizing fleet deployment under pressure from the high investment entailed by containerization. The era of consortia, however, came to a close in the early 1990s; intermodalism and the expansion of the major liner companies into forward and backward segments of the transport chain rendered them inflexible for pursuing individual strategies of product diversification with a view to larger market shares. Global alliances were finally born as a result of a major reshuffling of co-operation agreements and of the globalization of the production process on the demand side. The aim of this paper is to follow and assess the options available to an aggressive low-cost national fleet in its journey to competitive maturity through a period of changing organization of liner shipping, focusing on the course of the leading Korean container company, and one of the largest in the world today, Hanjin. It highlights at the same time both the deep structural changes which liner shipping has undergone in the last two decades and the effects of current changes, such as the recent wave of mergers in this sector.     

Evaluating economic and environmental value of liner vessel sharing along the maritime silk road

The Belt and Road initiative is a novel exploration of China towards strategic collaboration with Eurasia countries to an extent of a larger scale with higher and deeper level of cooperation. To meet the growing global demand of transportation, increasing numbers of liner shipping companies collaborate and form alliances to share vessel capacity and reduce capital costs. Effective liner shipping vessel sharing is essential for the Belt and Road initiative in terms of building efficient maritime transport networks. In promoting environmental development, shipping companies are required to attain higher environmental standards. However, limited literature relates vessel sharing to environmental performance. This paper studies the impacts of liner vessel sharing from the economic and environmental perspectives. Two container allocation models are developed for the two scenarios: with and without vessel sharing. The carbon emissions in transportation are calculated under both scenarios. Numerical studies are carried out using services along the China-Indochina Peninsula Economic (CIPE) Corridor. Liner shipping companies could benefit from vessel sharing in terms of significant profit improvement. Vessel sharing could also benefit the environment by reducing the CO₂ emissions dramatically.     

集装箱船舶大型化对上海港发展的影响和机遇

在集装箱航运市场中,由于超大型集装箱船优良的经济性能及全球集装箱航运结构的重组,并且在全球国际集装箱运输呈增长的趋势背景下,大批超大型集装箱船投入运营,对上海港的运营和发展形成一定的影响,但同时也给上海港的发展带来了机遇。上海港要应对国际航运市场的这种变化,就必须采取相应的策略。随着长三角经济圈的发展和洋山深水港一期、二期工程的完工,进一步巩固了上海港的国际集装箱枢纽港地位,上海港应抓住新的发展机遇,为上海早日建成国际航运中心奠定更加坚实的基础。     

Factors influencing container carriers’ use of coastal shipping

Coastal shipping is one of the most sustainable and economically competitive modes of transportation. This study employs the analytic hierarchy process (AHP) method to determine the importance of various factors influencing container carriers’ use of coastal shipping. A three-level hierarchical structure with the 17 attributes is proposed and tested. A previous AHP survey in Taiwan has indicated that port policy and infrastructure is the most critical factor influencing the coastal shipping by container carriers followed by operational cost, operational strategy and operational efficiency. Overall, the results indicate that the five most important attributes influencing the use of coastal shipping are simplified customs procedures; leasing a dedicated terminal; transhipment time; a favourable port charge system and efficient terminal operations.     

Risk perception affecting the performance of shipping companies: the moderating effect of China and Korea

Risks in the shipping industry have been highlighted and have attracted significant attention, especially following the bankruptcy of Hanjin in 2017. Due to the decrease in container volume, the business environment for large shipping companies in China has deteriorated. Therefore, major large shipping companies have implemented mixed ownership reform, which provides more opportunities for large Korean shipping companies to enter the Chinese shipping industry. This study first identifies risk perception, specifically focusing on the moderating effect of Chinese and Korean shipping companies, and then demonstrates the impact of these risks on shipping company performance. The results show that market, operational, and technical risks have a negative influence on Chinese shipping companies, whereas market, policy, financial, operations, and technical risks have a negative influence on Korean shipping companies. This study contributes to the fundamental understanding of the effect of risk perception on performance among shipping companies in both countries and calls for further research on risk management plans based on the risk factors identified herein. On a practical level, this study provides an important reference for operators and investors who seek to enter strategic alliances or joint venture in Chinese shipping industry.     

Across the waves: a bibliometric analysis of container shipping research since the 1960s

The paper investigates collaborative and semantic patterns that emerged between 1967 and 2013 about the theme of container shipping based on a corpus of 294 articles published in scholarly journals within the fields of transportation, supply chain, economics, geography, regional planning and development, and operations research. An analysis based on the co-occurrence of title words allows identifying dominant sub-themes and their evolution. Main results point to the gradual diversification of container shipping research, from the dominance of economics towards a more trans-disciplinary set of approaches which integrate port-related activities and multimodal networks. Yet, disciplinary specialization remains strong up to nowadays so that container shipping research remains rather fragmented. While co-authorships have increased over time, they remain polarized by few, weakly connected research battalions. Our study suggests that research on container shipping would benefit from more frequent contacts between such communities to foster in-depth cross-disciplinary studies and fundamental cooperation.     

Voyage-based statistical fuel consumption models of ocean-going container ships in Korea

ABSTRACT

Accurately estimating fuel consumption of ships is crucial for shipping companies, port authorities, and environmental protection agencies. The bottom-up approach is becoming increasingly popular because it can estimate ship fuel consumption by accounting for ship activity conditions, such as changes in voyage speed, time, and distance; however, its use is still limited when estimating ship fuel consumption. Ship-specific information, such as the daily fuel consumption rate for main and auxiliary engines for every vessel, is expensive to gather, and generally not collected from private shipping companies. To address this research gap, we develop simplified and composite ship fuel consumption models for ocean-going container ships by size using a regression model. To estimate the fuel consumption models for container ships, we rely on ship activity data, including average speed and sailing time, distance, and actual fuel consumption for main and auxiliary engines. This information is obtained from a major container shipping company in Korea. We estimate and validate the parameters associated with fuel consumption for five different container ship sizes, all of which are smaller than the Post-Panamax container ship (15,000 TEU and above).     

Cost analysis of bulk cargo containerization

ABSTRACT

Bulk cargo containerization (BCC) involves changes in the transportation mode of container shipping for cargo that uses bulk carriers without packing. This topic has recently attracted considerable attention as an alternative transportation method for container cargo. BCC is advantageous because it can address imbalances in the amount of cargo conveyed between the main and back hauls, thereby improving efficiency. A previous survey among companies involved in cargo shipping revealed that in addition to ocean freight, vanning and devanning, and customs clearance costs, consignees’ decisions were the key factor in selecting transport modes. The present study aims to clarify the cost competitiveness of container shipping and identify cost reductions that may increase the use of BCC. To quantitatively check the results of the survey employed in this study, we constructed a model based on consignees’ and container shipping companies’ costs to determine the choice of transport mode for back-haul trade, then examined the incentives for consignees and shipping companies. We found that BCC can be realized by cost reduction on the part of the consignee and profit improvement on the part of the container shipping company for some routes and goods. Although reducing the freight rate would effectively promote BCC, reducing other costs would not have the same effect.     

Green shipping management capability and firm performance in the container shipping industry

This study empirically identifies crucial green shipping management capability and examines its impact on firm performance using survey data collected from container shipping firms, including shipping companies and agencies. Exploratory and confirmatory factor analysis is performed to identify three critical green shipping management capability dimensions, namely, greener policy, greener ships, and greener suppliers. In this study, firm performance is categorized into environmental performance and financial performance. The results indicate that a greener policy has a direct and positive influence on both the greener ships and the greener suppliers factors. Greener ships and greener suppliers are found to have an indirect and positive influence on financial performance through environmental performance. Accordingly, this study suggests that container shipping managers could focus on organizational green shipping management capability, specifically regarding policies, ships, and suppliers, to improve their environmental and financial performance. The theoretical and practical implications of the findings for container shipping firms have been discussed.     

Reposition of empty containers of different life stages integrated with liner shipping network design

ABSTRACT

This paper integrates empty container reposition with container shipping network design considering the container life stages. A mixed-integer linear programming model is built to determine the liner shipping network, the initial launch ports of new containers, the ports for scrapping obsolete containers, the empty container reposition scheme and the containers of different life stages being used for a specific voyage. A case study is done by taking liner shipping among China, Japan and South Korea, Southeast Asia, Europe and the US as an example. The results show that over 93% of new containers are put into use in China while 63% of old containers are scrapped in Europe or the US, and 73% of containers used for packing cargoes from China to the US are those at the Decline Stage or the Exit Stage.     

Empty container reposition planning for intra-Asia liner shipping

This paper addresses empty container reposition planning by plainly considering safety stock management and geographical regions. This plan could avoid drawback in practice which collects mass empty containers at a port then repositions most empty containers at a time. Empty containers occupy slots on vessel and the liner shipping company loses chance to yield freight revenue. The problem is drawn up as a two-stage problem. The upper problem is identified to estimate the empty container stock at each port and the lower problem models the empty container reposition planning with shipping service network as the Transportation Problem by Liner Problem. We looked at case studies of the Taiwan Liner Shipping Company to show the application of the proposed model. The results show the model provides optimization techniques to minimize cost of empty container reposition and to provide an evidence to adjust strategy of restructuring the shipping service network.     

Book reviews

We show in this paper that the throughput data for the top 300 container ports reported each year by the various authorities follows a simple truncated lognormal distribution. This surprising phenomenon repeats itself every year from 1982 to 2006, despite many tumultuous changes in the container shipping world. The empirical data suggests that Gibrat's Law of proportionate growth indeed holds for the world container throughput data. Unfortunately, the classical stochastic growth model and other variants often used to explain the origin of this law appears to be too simplistic for the container terminal industry. We use instead the perspective that the container terminal throughput data are essentially an aggregate measure of the number of visitations as each container circulates on the world shipping network, and use this to propose a Markov chain based container circulation model to explain the origin of this phenomenon. Simulation results show that our network-based model is able to replicate the behavior of the empirical data to a reasonable degree of accuracy, and does not contradict the law of proportionate growth. More importantly, this model is able to replicate the relationship between the degree of connectivity of a port (i.e. number of linkages with other ports) and its association with the container throughput data, an empirical regularity which could not be explained using classical approaches.