Port Specialization and Efficiency—The Case of Ghana

The US Shipping Act of 1984 permits ocean liner vessel operators and shippers to make use of service contracts to further their mutual interests. However, starting from the very day this novel provision was incorporated into the Act, it has remained as a bone of contention between shippers and carriers serving US trade routes. This article highlights the major issues that have sprouted subsequent to the introduction of service contracts in ocean liner shipping. The author concludes with some logical suggestions to fine-tune the Act, without interfering with its legislative framework.     

Service contracts: a case study of unfulfilled promises

The US Shipping Act of 1984 permits ocean liner vessel operators and shippers to make use of service contracts to further their mutual interests. However, starting from the very day this novel provision was incorporated into the Act, it has remained as a bone of contention between shippers and carriers serving US trade routes. This article highlights the major issues that have sprouted subsequent to the introduction of service contracts in ocean liner shipping. The author concludes with some logical suggestions to fine-tune the Act, without interfering with its legislative framework.     

Mandatory independent action: a legislative paradox

The US penchant for competition in ocean liner shipping, coupled with the might of lobbyists in Washington, D.C.,led to the introduction of intraconference competition in the form of mandatory independent action. The author analysis this controversial provision and its ramifications, and suggests pragmatic modifications to quell the war of attrition between shippers and carriers.     

The limited scope of seaborne cargo liability regime: new political–economic environments in the 21st century

ABSTRACT

Since the 1920s, seaborne cargo liability regimes have introduced a small number of mandatory rules into international carriage of goods by sea, through the Hague–Visby Rules, to restrict freedom of contract. These rules worked within a limited scope to offset imperfect competition in the shipping markets. However, the recent Hamburg and Rotterdam Rules attempted to extend this scope of seaborne cargo liability regime, which seems to be more extensive than is desirable. This article compares and examines the shipping sub-sectors’ environment and maritime economics over the past century up to date. The new business patterns of the shipping sub-sectors, the rising influence of developing countries, and the containerisation are creating new shipping environments for this area of law. Compared with previous decades, imperfect competition is only found in a smaller number of areas within the shipping markets nowadays. This article argues that only a limited scope of application is needed for international seaborne cargo liability regime. Thus, these new economic and political realities call for innovative modifications to the recent rules regarding the scope of application, and future regime should refocus international uniformity on a limited scope.     

Short-term liner shipping bunker procurement with swap contracts

The bunker price fluctuations in recent years have severely threatened the stability of liner shipping companies’ operations. As an efficient countermeasure, the swap contract is widely adopted throughout the liner shipping industry to hedge the procurement risk resulting from the bunker price fluctuation. This paper looks at the short-term liner shipping bunker procurement problem with swap contracts (BPPSC), aiming to optimally plan the amount of bunker purchased from the spot market and the amount hedged by the swap contract for several months ahead. This BPPSC is first formulated as a bunker procurement cost mean-variance minimization (MVM) model, and is subsequently solved using a tangible two-step approach developed in this study. In the first step, the movements of the swap contract price and the spot market price of the bunker are described using a calibrated multivariate generalized autoregressive conditional heteroskedasticity (mGARCH) time series model. In the second step, the MVM model is approximated and solved by a price scenario tree constructed from the mGARCH time series model. A numerical example shows that the risk hedging strategy obtained can simultaneously control the bunker procurement cost as well as the procurement risk from price fluctuations. This article is a revised and expanded version of the abridged eight-page paper entitled ‘Optimal hedging for liner bunker procurement’ presented at ‘2015 International Conference on Logistics and Maritime Systems (LOGMS 2015)’, Hong Kong, 27–29 August 2015.     

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.     

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.     

Optimal container ship size: a global cost minimization approach

ABSTRACT

Currently, the best container ship size in a service is determined mainly by the liner operator, considering only the economies of scale of ships. Its external diseconomies to the ports and shippers are usually not considered in the decision-making process, which may reduce the overall efficiency and lead to global nonoptimality. This study incorporates the cost to the shipping companies at the main lines, ports, and feeder services, as well as the external costs to shippers and ports in a hub-and-spoke network, and determines the best ship size and the number of weekly services to minimize the overall costs. The external cost to the shippers in the feeder ports is assumed to be proportional to the feeder cost, and a sensitivity analysis is provided. The maximum container ship size is estimated according to different levels of freight demand. A numerical analysis shows that the optimal size should be smaller than the current biggest container ships in service.     

Liner shipping development trends

The expansion of liner shipping paralleled developments in retailing and containerization introduced scale economics. The liner industry has moved into an era of prosperity, and containerships have been affecting demand for other ship types. Demand growth is generally taken for granted, but several factors have been putting pressure on smaller carriers, including upsizing and route network developments. Trends appear to favour independent operation over vessel sharing and increasing profitability suggests that carriers will seek to own more of their own assets. Competition from logistics providers will increasingly dictate how the industry develops.     

Liner shipping development trends

The expansion of liner shipping paralleled developments in retailing and containerization introduced scale economics. The liner industry has moved into an era of prosperity, and containerships have been affecting demand for other ship types. Demand growth is generally taken for granted, but several factors have been putting pressure on smaller carriers, including upsizing and route network developments. Trends appear to favour independent operation over vessel sharing and increasing profitability suggests that carriers will seek to own more of their own assets. Competition from logistics providers will increasingly dictate how the industry develops.     

A conceptual application of cooperative game theory to liner shipping strategic alliances

Since its advent, the liner shipping industry has been characterized by fierce competition and cooperation amongst the member carriers. In recent years, almost all the liners have sought extensive cooperation with others, as reflected mainly by the formation of strategic shipping alliances. Despite this, there are still some liners who prefer the ‘go-it-alone’ policy and have achieved relative success. It seems that cooperation is not always necessary for a liner company's success. It follows that a study that aims to find the rationale behind liner cooperation (or non-cooperation) is of great significance. Over many years of development, game theory has proved to be a useful tool in the study of economics. It is analytically applicable in this market. With these arguments in mind, this paper aims to apply cooperative game theory to analyse co-operation among members of liner shipping strategic alliances. This will involve: (i) presenting a detailed and systematic analysis of liner shipping strategic alliances: (ii) a concise overview of the development of game theory with specific focus on cooperative game theory, and (iii) deducing a conceptual framework through the application of cooperative game theory to liner shipping strategic alliances. The accomplishment of the aforementioned objectives will enhance understanding of inter-organizational relationships and decision-making behaviour in the liner shipping sector.     

A conceptual application of cooperative game theory to liner shipping strategic alliances

Since its advent, the liner shipping industry has been characterized by fierce competition and cooperation amongst the member carriers. In recent years, almost all the liners have sought extensive cooperation with others, as reflected mainly by the formation of strategic shipping alliances. Despite this, there are still some liners who prefer the 'go-it-alone' policy and have achieved relative success. It seems that cooperation is not always necessary for a liner company's success. It follows that a study that aims to find the rationale behind liner cooperation (or non-cooperation) is of great significance. Over many years of development, game theory has proved to be a useful tool in the study of economics. It is analytically applicable in this market. With these arguments in mind, this paper aims to apply cooperative game theory to analyse co-operation among members of liner shipping strategic alliances. This will involve: (i) presenting a detailed and systematic analysis of liner shipping strategic alliances: (ii) a concise overview of the development of game theory with specific focus on cooperative game theory, and (iii) deducing a conceptual framework through the application of cooperative game theory to liner shipping strategic alliances. The accomplishment of the aforementioned objectives will enhance understanding of inter-organizational relationships and decision-making behaviour in the liner shipping sector.     

Dynamics of liner shipping service scheduling and their impact on container port competition

Container ports provide the primary interface where physical exchange between buyers and sellers of containerised shipping capacity can be consolidated and realised. Consequently, ports that are able to complement and add value to the objectives of shipping lines and shippers will become focal points for containerised cargo flows. To evaluate container port competition, the authors propose a practical and direct approach based on revealed preferences of shipping lines with respect to container shipping service dynamics. The container shipping networks are generated as carriers formulate their service schedules to capitalise on opportunities that are presented by evolving container trade patterns along trade routes and relative changes in the competitive profile of the ports of call. Empirical results showed that this approach offers a deeper understanding on the workings and evolution of competitive dynamics between ports, which may not be obvious from observations of port performance at the aggregated level. Benefits of the approach also include raising awareness that policy makers should be aware of the need to understand the nature, extensity and intensity of competitive relationships between ports as they craft and implement policies to correct for the actual or perceived market failures in the industry.     

A cost-benefit study of the Suez Canal large-scale dredging project

The choices faced by shippers are generally complex. Typically, the shipper is presented with a range of alternative carriers, each of which has its individual strengths and weaknesses. A survey of companies purchasing shipping services in an overnight RO/RO ferry trade was conducted to identify their priorities and to help understand and the decision-making process. The shippers were found to be conservative decision makers with a strong emphasis on quality of service.     

Carrier selection in a RO/RO ferry trade Part 1. Decision factors and attitudes

The choices faced by shippers are generally complex. Typically, the shipper is presented with a range of alternative carriers, each of which has its individual strengths and weaknesses. A survey of companies purchasing shipping services in an overnight RO/RO ferry trade was conducted to identify their priorities and to help understand and the decision-making process. The shippers were found to be conservative decision makers with a strong emphasis on quality of service.     

国际油运市场现状及发展趋势

随着世界经济的稳步发展,对石油的需求也在不断增加,而大部分的石油都是通过海上运输的,因此,国际油运市场备受关注。介绍了国际油运市场的现状,提出了影响国际油运市场的主要因素,其中包括国际经济形势、国际石油消费需求和运力,并阐述了三者与国际油运市场走势的关系,在此基础之上,展望了未来的国际油运市场发展趋势,并着重对未来市场的运力发展趋势进行了分析。     

长三角一体化首推五港合一

随着世界经济的稳步发展,对石油的需求也在不断增加,而大部分的石油都是通过海上运输的,因此,国际油运市场备受关注。介绍了国际油运市场的现状,提出了影响国际油运市场的主要因素,其中包括国际经济形势、国际石油消费需求和运力,并阐述了三者与国际油运市场走势的关系,在此基础之上,展望了未来的国际油运市场发展趋势,并着重对未来市场的运力发展趋势进行了分析。     

我国集装箱班轮运输市场垄断程度研究

从市场集中度指数、市场力量和垄断行为3个方面考察我国国际集装箱班轮运输市场的垄断程度，显然高于将全球作为“一个”市场的程度。从市场集中度指数可以认为我国班轮运输市场已经达到中型寡头垄断程度。我国远洋班轮航线的勒纳指数高于0．6，甚至接近于1，说明班轮公司市场力量之强大。而我国现行的法律法规中没有为班轮运输市场的买方预设运价谈判和利益诉求机制，则使运输需求快速增长的中国外贸企业明显处于弱势地位。     

Daily Maersk’s impacts on shipper’s supply chain inventories and implications for the liner shipping industry

The liner shipping industry has long been characterized by a weekly sailing frequency and schedule unreliability. This research is motivated by the launch of the revolutionary “Daily Maersk” service in late 2011, which introduced daily departures and “absolute reliability” in the Asia–North Europe trade lane. This article analyzes Daily Maersk’s impacts on a shipper’s supply chain inventories and profound implications for the liner shipping industry as a game changer. The quantitative analyses show that the impact of more frequent sailings is most significant on a shipper’s cycle stock, while improving schedule reliability substantially reduces safety stock and pipeline stock. Daily Maersk is most valuable for products that have high value density, high inventory holding cost ratio, low demand variability, and high service level (SL) requirement. These findings imply that the trend of liner alliance/merger/acquisition is likely to continue or even accelerate as shipping lines consolidate fleet capacity to offer more frequent sailings. Rival carriers may step up their involvement in terminal operations to improve schedule reliability. They also need to rethink about their SL targets and clearly define their preferred customer segments.     

Conference-shipper loyalty contacts: Time for a re-think?

This paper examines the purposal by the British Shipper's Council (BSC) and the UK government to place a statutory limit, by means of a regulations implementing the EEC rules for competition, upon the proportion of a shipper's cudstom that may be demanded in a loyalty agreement with a liner conference.

The development of 70% loyalty is traced through the following the various drafts of the EEC competition rules for sea transport; the department of trade investigation which found freight rate disparities that were caused partially by the less competitive environment in the UK than on the Continent; and evidence given on 70% loyalty beforew the house of Lords Select Commitee on the European Communities.

By considering the precise proposals, as suggested by the BSC, and means of enforcing them, 70% loyalty is found to be eminently practicable. the short-term consequences of its introduction are unlikely to be great, considering the shippers' needs for a good quality service; but in time the additional competition fostered by a less-than-100% tie would cause radical changes; conferences would have to aopt limit-pricing and respond to competition loyalty ties might be restricted to service contracts with large shippers. These effects would be felt far more in the UK since the continental environment is in any case more competitive.

It is concluded that 70% loyalty should be imposed upon conferences by means of the EEC Regulations in order to enhance the competitive environment of linear shipping.