Achieving an ASEAN single shipping market: shipping and logistics firms’ perspective

ABSTRACT

To establish an Association of Southeast Asian Nations (ASEAN) Single Shipping Market (ASSM) is an important part of ASEAN governments’ overall plan to achieve an ASEAN Economic Community by 2015. It is expected that a single shipping market will improve the region’s logistics performance and international competitiveness. To achieve this vision, however, the ASEAN countries need to remove any remaining barriers to logistics performance. In this light, the objective of this paper is to identify these barriers and assess their effects on the logistics performance of shipping and logistics firms based in ASEAN countries. Using a questionnaire-based survey, the study revealed several barriers affecting their logistics performance with varying significance among these countries. Unless these barriers from the perspective of the industry are removed, the ability of the shipping and logistics industry to benefit from a liberalized market would be limited. These perceived barriers are examined in detail and strategies to address them are proposed. The ASEAN experience is applicable to similar countries in the process of integrating their international shipping sector as well as contributes to the understanding of the different barriers and how these barriers can affect the logistics performance of shipping and logistics companies.     

Vertical integration and its implications to port expansion

ABSTRACT

Over the years many shipping lines have established terminal operation companies, with some set up as independent firms. However, port authorities and local governments have not always welcomed external investment and control with open arms. The economic implications and each stakeholder’s best strategies remain unclear. This study develops an analytical model in order to study the effects of vertical integration, with a focus on shipping lines’ investment in ports’ capacity. Modelling results suggest that vertical integration between terminal operator and a shipping line leads to higher port capacity, port charge, market output and consumer surplus. It also reduces delay costs. All these results suggest that vertical integration can be an important source of synergy for the maritime industry. Although vertical integration increases the participating carrier’s output at the expenses of non-integrating rival shipping firms, our numerical analysis suggests that the overall social welfare is likely to increase. Preliminary empirical tests confirm that vertically integrated ports handle more traffic volumes and are associated with better infrastructure and equipment. Therefore, port authorities and government regulators should carefully review the market competition status as well as port expansion plans.     

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.     

Perceptions of foreign exchange rate risk in the shipping industry

This is an analysis of the impact of exchange rate risk on the performance of major shipping companies from two important maritime nations, Japan and Norway. For the shipping industry, such risk is exacerbated by freight rates fixed in US dollars which must then be converted into numerous other currencies. The appreciation of the Yen against the US dollar has been such that Japanese companies have been impelled to insulate themselves from exchange rate movements by natural hedging. For Norway, where fluctuations of the Krone against the US dollar have been less dramatic, exposure has been maintained, allowing an element of speculation. In both cases the market indicates that exchange rate risk is a significant factor in the determination of corporate performance.     

Perceptions of foreign exchange rate risk in the shipping industry

This is an analysis of the impact of exchange rate risk on the performance of major shipping companies from two important maritime nations, Japan and Norway. For the shipping industry, such risk is exacerbated by freight rates fixed in US dollars which must then be converted into numerous other currencies. The appreciation of the Yen against the US dollar has been such that Japanese companies have been impelled to insulate themselves from exchange rate movements by natural hedging. For Norway, where fluctuations of the Krone against the US dollar have been less dramatic, exposure has been maintained, allowing an element of speculation. In both cases the market indicates that exchange rate risk is a significant factor in the determination of corporate performance.     

An empirical assessment of ISM Code effectiveness on performance: the role of ISO certification

ABSTRACT

Although the introduction of the International Safety Management (ISM) Code aimed at increasing the safety standards in the maritime industry, several studies conducted so far argue for its inability to successfully fulfill its goals. The purpose of the current study is to evaluate the ISM Code effectiveness by drawing analogy from similar applications of ISO 9001 effectiveness in service companies. It also aims to determine its impact on firm performance and differentiate between ISO and non-ISO-certified shipping companies. Findings indicate that ISM Code effectiveness consists of two dimensions, namely continuous improvement and customer satisfaction focus, and the significance of its contribution on improving company performance is revealed, especially in the case of ISO-certified shipping companies. Moreover, the continuous improvement dimension was found to affect performance at a greater extent.     

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.     

Environmental awareness and practice concerning maritime air emissions: the case of the Greek shipping industry

One of the most urgent environmental problems facing the shipping industry today is the reduction of Greenhouse Gas (GHG) emissions from its operations and the possible cost-effective ways in which this reduction could be accomplished. Various technical and operational measures have been proposed as well as market-based instruments for the achievement of the compliance of marine industry with these measures. This paper investigates the levels of environmental awareness of the Greek shipping companies and their views and practices on the proposed policies for the reduction of GHG emissions from their ships. A survey was carried out using a questionnaire distributed to Greek shipping companies of different sizes, involved in different segments of the marine industry, so that the survey's results not only represent a large part of the Greek shipping industry but also reveal the different environmental attitudes and practices on maritime GHG emissions among the shipping companies. Given the size and the importance of the Greek shipping industry in the international maritime field, this paper's results present a special significance as they could be further analyzed and taken into account for the achievement of the compliance of marine industry with any future policy instrument for the reduction of maritime GHG emissions.     

Enhancing the competitiveness of Korea’s container shipping industry through structural improvements

ABSTRACT

After the collapse of Hanjin Shipping in 2016, Korea faced the task of reconstructing its container shipping industry by enhancing the competitiveness of its shipping companies in a rapidly evolving market environment. Responding to this need for policy design, this study first attempts to understand the industry based on the shipping ecosystem, which comprises the following four areas: shipping finance, collection of cargo, acquisition of ships, and partnership among carriers. Second, it lists the structural problems, along with the remedial policy alternatives, that were identified after conducting in-depth interviews with industry experts, which included mid-level managers. Third, it conducts an importance-performance analysis to classify problems according to their importance and performance, followed by an analytic hierarchy process analysis to define the priorities of policy alternatives. Finally, drawing on the empirical results, the paper concludes with suggestions on an integrated policy package for the container shipping industry.     

对体系运行中假记录的探讨

国际安全管理规则（ISM）实施后,各航运公司相继实施了体系化管理,体系的建立与运行推动了各航运公司的各项管理工作,对保障船公司船舶安全与防污染起到了根本性的作用。然而,体系运行的有效性问题一直困扰着各家公司。本文分析了体系运行中＂假记录＂的产生原因、危害及治理方法,仅供同行参考。     

Crucial factors influencing international logistics operations for African landlocked countries – A case study of Burkina Faso

ABSTRACT

This study aims to evaluate the crucial factors influencing international logistics operations for African landlocked countries. To this end, a case study and a questionnaire survey were conducted. A total of 147 usable responses from container shipping firms were obtained as a result of the questionnaire survey. The results of factor analysis revealed that transportation capability, external risks, information integration, logistics infrastructure, local agents’ logistics capability, and national law and policy were crucial factors influencing the logistics operations of African landlocked countries. Specifically, local agents’ logistics capability was perceived by respondents to be the most important factor. Moreover, the results of the study also indicated that the highest factor mean values of small shipping companies were related to transportation capability, external risks and the local agents’ logistics capability, whereas container shipping companies that arranged trucks for inland transportation paid more attention to the external risks, logistics infrastructure, the local agents’ logistics capability, and national law and policy.     

环日本海地区的航线优化研究

随着环日本海地区贸易往来的频繁,优化该地区航运网络结构,提升海运通达性,成为推动该地区经济发展的重要手段.因此,提出一个以航运企业利润最大为目标的航线网络优化模型.该模型综合考虑航线、船型与需求间的关系,以船舶的载重量为约束,优化航运企业的资源配置,设计航线及选择适宜船型.利用实际数据对该模型进行检验,结果显示,优化的航线网络以及确定船型在不同经济条件下有所差别,可为环日本海航线的开辟与运营提供借鉴.     

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.     

Innovation, capabilities and competitive advantage in Norwegian shipping

As a high-cost country, it is believed that Norway has to build its competitiveness in most industries on innovation and knowledge-intensive products. The shipping industry is no exception. It has to be innovative in order to prosper. This unison conclusion, which has been drawn in several research projects during the last 10-20 years, is probably also applicable for companies in other high cost countries. A major issue in this research is how the industry can develop and maintain innovativeness and international competitiveness. The aim of this paper is to discuss the conclusion drawn in previous research concerning how the shipping industry can be innovative. It concludes that shipping companies have to improve their skills and competencies in a stronger interplay between organizations within and without the maritime cluster. This may increase their total capability and innovativeness and create distinctive competitive advantages that are difficult to imitate.     

Causes and effects of FDI by the Norwegian maritime industry

This paper analyses foreign direct investments (FDI) in Asia by the Norwegian maritime industry. It focuses on three topics: (1) Why do Norwegian maritime companies invest abroad? (2) What are the effects of maritime foreign direct investments on the Norwegian maritime milieu? (3) What are the effects of these investments on the host country? By analysing specific Norwegian maritime companies, it was found that the FDIs have partly been induced by the instability of the Norwegian policy towards this sector. Several firms also point at the importance of being closer to the Asian market as a significant reason for FDI, and the Norwegian ship equipment industry tends to 'follow' the shipping companies abroad. The domestic effects of FDI are uncertain, and are likely to depend on the motivation behind the investments. Finally, using Singapore as an example, it is argued that the host country effects of FDI tend to be positive.     

The competitiveness of short sea shipping in multimodal logistics supply chains: service attributes

In Europe, ports are confronted with a closer integration in the maritime and shipping industries. The co-operation agreements can take several forms such as alliances and mergers among shipping lines, conferences, involvement of shipping companies in terminal management, and extending interests in inland transport of shipping companies. In this paper we give a brief overview of these different types of agreement and we examine the consequences of this evolution of the market structures in which ports and shipping companies have to operate. More specifically, attention goes to the competitive position of the port in this new environment. It is clear that the role of the port and the port authorities has to be redefined to guarantee that it remains a fully fledged player in this fast evolving integrated market.     

Critical factors for successful implementation of the ISM Code in some Pacific Islands states

Although the International Safety Management (ISM) Code was fully implemented from July 1st 2002, not all countries signatories to the Code, particularly developing countries such as Pacific Islands states, are successful in the introduction and implementation of the instrument. In this paper, we aim to determine factors that facilitate the successful implementation of the ISM Code particularly for the above-named region. Through a thorough literature review, a model of 11 critical factors for the Code implementation success was proposed. These factors were empirically tested using the triangulation of a survey of a group of maritime administration personnel and shipping companies in Fiji and two indepth interviews with senior officers in the Samoa Maritime Administration during the period June–August 2007. The proposed factors were verified by both survey respondents and interview informants, i.e., that maritime safety awareness rooted in a safety culture, senior management commitment and leadership across organisations and the industry, employee involvement and empowerment, enforcement capability of flag state administrations, application of quality management principles in safety management systems, rationalisation of documentation, among others, are essential to the successful implementation of the Code. This research hopes to contribute to the literature and to provide maritime administrations and shipping companies in the Pacific Islands states with additional reference and information that will help expedite the effective implementation of the ISM Code. The need for future research directions is expressed in this paper. Additional investigations, e.g., conducting the same research in other Pacific Islands states as well as in other developing countries in the Asia-Pacific region, would enhance the validity and reliability of this study’s findings.     

集装箱船舶大型化对中国班轮运输的影响

通过竞争情报分析提供了各班轮公司未来船队结构和运力的变化趋势,由此观察到各班轮公司为了降低自身的营运成本,在最近几年大量订购超巴拿马型甚至更大型的集装箱船舶参与运输,但是却不能达到其预期的规模效应。原因就在于相当一部分成本随着船型的增大而线性增加,规模不经济。我们探讨了中国的班轮运输市场的几个重要特点:中外贸易的不平衡导致了货源的不平衡;未来贸易结构的调整会影响航线的布局和调派;贸易上的不稳定因素使班轮公司遇到外在的风险。这些特点会深远地影响集装箱船舶大型化的经济受益,相反的,集装箱船舶大型化的趋势也会加剧这些负面的影响,危及整个班轮运输市场。     

Do mergers and alliances influence European shipping and port competition?

In Europe, ports are confronted with a closer integration in the maritime and shipping industries. The co-operation agreements can take several forms such as alliances and mergers among shipping lines, conferences, involvement of shipping companies in terminal management, and extending interests in inland transport of shipping companies. In this paper we give a brief overview of these different types of agreement and we examine the consequences of this evolution of the market structures in which ports and shipping companies have to operate. More specifically, attention goes to the competitive position of the port in this new environment. It is clear that the role of the port and the port authorities has to be redefined to guarantee that it remains a fully fledged player in this fast evolving integrated market.     

Measuring and sustaining the UK maritime skills base: A review

Numerous factors over the past three decades have contributed to a major decline in the number of seagoing staff in the United Kingdom. These include shipping companies opting for other flags, as well as the profession itself becoming less and less attractive for school leavers. This decrease in numbers is not only significant for shipping companies, but also for the allied services which used to get supported from seafarers coming ashore in search of a new career. It is now recognised that changes in the maritime skills base will affect both the seagoing as well as the shore side of the industry.