Examining quick delivery at an affordable cost by the NSR/SCR-combined shipping in the age of Mega-ships

ABSTRACT

The Mega-ships, the maximum containerships represented by 20,000TEU-class (LOA:400m, Breadth: 60m, Draft: 16m) which are able to transit both the Malacca Strait and the Suez Canal, have emerged in 2013, aiming at lower shipping cost by economy of scale. At the same time, they inevitably increased port calls in a rotation to collect more cargo demand, resulting in the longer transit time than ever before. Taking this trend into account, the authors proposed the quick delivery scenario between East Asia and Northwest Europe by the NSR (Northern Sea Route)/SCR (Suez Canal Route)-combined shipping, of which 4,000 TEU ice-class containership transits the NSR during the summer season and the SCR in the wintertime, based on a year-round scheduled operation. The quick delivery scenario gives the shorter transit time at an affordable shipping cost depending on the NSR navigable season length. However, the quick delivery scenario cannot avoid uncertainties in navigation especially via the NSR in the summer season, due to rough weather, sea ice, low visibility and icing in the icy water section of the NSR. The authors preliminarily concluded that a year-round scheduled operation of the NSR/SCR-combined shipping will be secured, if the practical navigation schedule is appropriately prepared.     

Economic feasibility of an NSR/SCR-combined container service on the Asia-Europe lane: a new approach dynamically considering sea ice extent

The trend towards global warming and the rapid decline in the extent of summer Arctic sea ice over recent years has increased the feasibility of international Arctic shipping. In this study we propose a seasonal NSR (North Sea Route)/SCR (Suez Canal Route)-combined shipping service linking Shanghai and Rotterdam, using the Northern Sea Route during the economical navigable window but using the traditional Suez Canal Route at other times. Different from the previous literatures, this paper dynamically considers the sea ice extent in the model, which is more reasonable for the assessment of Arctic container shipping, because fuel consumption is highly related to ship speed, while ship speed is determined by the relative distances of ice-covered and ice-free route stages. A new approach is developed to predict the time points at which the ship enters and exits the ice-covered stage, given that both the ship position and the extent of sea ice are constantly changing. The results show that the NSR/SCR-combined Arctic container service can be more economical than the SCR, given lower NSR tariffs.     

How do the new shipping routes affect Asian liquefied natural gas markets and economy? Case of the Northern Sea Route and Panama Canal expansion

This study focuses on the expected impact of Northern Sea Route (NSR) usage and the Panama Canal (PC) expansion on liquefied natural gas (LNG) imports of Asian countries, from not only the macroeconomic viewpoint but also diversification of the supplying countries. First, the amounts saved from shipping costs due to these events are estimated, based on scenarios on the navigable period of the NSR, transit fee of the NSR considering the exchange rate between the Russian ruble and US dollar, and bunker fuel price. Second, a spatial general equilibrium model based on macroeconomic theory is applied to predict changes in LNG trade patterns and measure economic impacts due to the reduction of shipping costs. Finally, the impacts of NSR usage as well as the PC expansion on LNG imports of Asian countries are discussed based on the calculations. The results show that diversification of supplying countries for LNG imports can be observed, especially in Japan, the largest LNG importer in the world, and other Asian countries are secondarily affected by changes in Japan’s import pattern, with limited impacts on these countries’ national economies.     

Ports in Proximity – Competition and Coordination among Adjacent Seaports,edited by Theo Notteboom,Cesar Ducruet,and Peter de Langen

The summer minimum extent of Arctic sea ice shrank drastically in these years, and the opportunity on Arctic international shipping emerged. The Northern Sea Route (NSR), formerly blocked by permanent ice, was completely ice-free in September in the past 3 years. Because this route is much shorter than conventional Asia–Europe shipping lane, many maritime countries have paid attention to exploit the enormous potential of the Arctic Ocean from economical consideration. This study measured the economical advantage of the seasonal NSR by calculating the shipping cost saved.     

Key criteria influencing the choice of Arctic shipping: a fuzzy analytic hierarchy process model

As Arctic sea ice shrinks due to global warming, the Northern Sea Route (NSR) and the Northwest Passage (NWP) offer a substantial reduction in shipping distance between Asia and the European and North American continents, respectively, when compared to conventional routes through the Suez and Panama Canals. However, Arctic shipping routes have many problems associated with their use. The main objective of this paper is to identify the key criteria that influence the decisions of shipping operators with respect to using Arctic shipping routes. A multi-criteria decision-making methodology, the Fuzzy Analytic Hierarchy Process, is applied to rank four potential categories of criteria (‘economic’, ‘technical’, ‘political’ and ‘safety’ factors) and their sub-criteria.

The results of the analysis suggest that, on aggregate, ‘economic’ is the most important category of influential factors, followed by ‘safety’, ‘technical’ and ‘political’ factors. The paper concludes, however, that the most influential specific sub-criteria relate to risks that lie mainly within the ‘safety’ and ‘political’ domains and that, especially in combination, these overwhelm the importance which is attached to ‘economic’ factors such as reduced fuel use. Finally, the implications of these findings for the future development of Arctic shipping are addressed at a strategic level.     

An exploratory study on the Northern Sea Route as an alternative shipping passage

This qualitative inductive research explores the potential benefits for the Scandinavian economy and ports through the implementation of the Northern Sea Route (NSR) as an alternative for container shipping to the established Southern route through the Suez Canal. To extract expert’s opinions and address these objectives, we utilised in-depth face-to-face semi-structured interviews through purposive sampling in a single case study setting. The analysis of the data demonstrates that the commercialisation of NSR can yield benefits for the Scandinavian economy (e.g. GDP increase, jobs creation) and reveals the benefits of Scandinavian ports (e.g. ECA’s, flexibility, hinterland, etc.) compared to other ports in North West Europe, which potentially grasp the NSR as an opportunity. However, it is highlighted that this can only be achieved if Scandinavian countries are proactive and secure their involvement.     

Shipping operations support in the “High North”: examining availability of icebreakers along the Northern Sea Route

A rather significant number of business entities already operate within (or, have considered to exploit) the Arctic region, focusing upon previously untapped resources such as precious minerals and large quantities of oil and gas; touristic and fishing activities are clearly on the rise, with various endeavors of maritime transport also being put forward. Up until recently, harsh year-long environmental conditions have significantly hindered the necessary access and transport connections in the Arctic. Even in the case that weather conditions did permit vessels’ passage, unreliable navigational aids and lack of infrastructure/support provided obstacles difficult to overcome. However, environmental data recorded during the last couple of decades clearly indicates that there is a continuous decline of ice coverage in the “High North.” Given this steady decline, the Arctic has now been viewed as a promising field for economic activities and is considered as a potential connecting corridor between Asia and Europe/America (and vice-versa). As human presence and operations are expected to intensify there, it is of utmost importance to evaluate the current level of support towards ships that will be crossing the region; capabilities in relation to search and rescue (SAR) operations and oil spill response are also important. The analysis in hand will first deliver a discussion of the so-called Arctic Passages. While various different maritime routes have been proposed in relation to the Arctic, the most promising one, the Northern Sea Route (NSR), will provide the epicenter of discussion. Through an extensive literature review that includes numerous internet resources, the current analysis will identify the numbers of icebreakers already operating in the NSR, as well as those that will be commissioned into service in the near future. The choice to research the specific type of vessels is supported by a simple argument: icebreakers currently are and will continue to be in the foreseeable future the main “tool” to support shipping activities in the Arctic. Furthermore, emergency management capabilities in the Russian Arctic will be examined to include the current state of rescue coordination centres along with the availability of SAR assets. Additionally, the efforts thus far by the Arctic Council to increase coordination and interaction among the States involved in Arctic affairs will be summarized; the latter will be achieved via a brief review of a very important legally binding agreement: the “search and rescue” instrument. In conclusion, the Russian State has already heavily invested in icebreakers’ building and their current number is fully capable to handle the present level of limited traffic. On the other hand, ships are currently faced with long distances to cross (often without adequate support) adverse environmental conditions, unpredictable hurdles, and slow response times in case of an emergency. Therefore, in case ships operating in the region are increased, it will be difficult to deal with all the additional demands for support. Of particular interest is the fact that considering the vast area of the NSR, the overall available response capabilities in the region under discussion are rather thin; any further increase of maritime traffic in the “High North” must be balanced with additional strengthening of emergency management capabilities. In any case, should the NSR become fully integrated in the global maritime transport system, Russia’s geopolitical status will be clearly improved and further research is needed to discuss the implications both at the regional and global levels.     

Operational measures to mitigate and reverse the potential modal shifts due to environmental legislation

On 1 January 2015, the sulphur upper limit for marine fuels used within sulphur emission control areas was lowered from 1% to 0.1%, with which vessels can comply only through using pricier ultra-low-sulphur fuel, or investing in abatement technologies. A potential increase of fuel prices could lead to closures of services due to the combined effects of loss of market due to higher freight rates, and increased operational costs. This paper builds on previous work allowing the modelling of modal shifts between sea and land-based options, and assesses the potential of operational measures that ship-owners can deploy to cope with the threat of the low-sulphur requirements. The measures include speed reduction, change of service frequency, use of alternative fuels such as liquefied natural gas, investments in scrubber systems, and improved fleet assignment. The proposed measures are tested on a set of case studies for services that are part of a short sea shipping network of a leading Ro-Ro operator. The results of this work can be useful to practitioners seeking to design new strategies that improve the resilience of their network, as well as to regulatory bodies designing new regulation that could have negative implications on certain sectors.     

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.     

A reactive container rerouting model for container flow recovery in a hub-and-spoke liner shipping network

This paper focuses on the container rerouting due to a disruption, aims at making the optimal container flow recovery plan for the affected liner shipping company. First, we make the initial effort to bring up with a basic framework of disruption management for liner shipping. Second, we present a compact integer linear programming model for addressing the container rerouting problem under the proposed framework in a hub-and-spoke liner shipping network, based on a given recovery vessel schedule that determines to omit a port of call. Other shipping companies’ services and other modes (roadway, railway, and airline) as candidate alternative means to transport the miss-connected containers are also incorporated in the proposed model. The container flow recovery plan would select the optimal alternative paths for the miss-connected containers balancing the trade-off between container transport costs and delivery delay penalty costs. Finally, a case study from a global liner shipping company is investigated and the computational results indicate the model can be solved effectively and efficiently for the real-scale problem. Thus, the proposed approach in this paper can supply real-time decision support tool for the liner shipping operators on handling the process of container flow recovery.     

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.     

影响航运市场的要素之分析

在定量分析基础上提出国际航运市场中运价与运量、运力、油价等影响因素之间的作用模型,应用此模型解释近几年航运市场的价格变动并向航运企业提出相应应对措施。     

外资进入中国航运市场现状分析及应对策略

随着中国加入WTO,市场的不断开放,外资航运巨头加速了在中国的扩张,这给中国的航运企业很大压力和挑战,本文剖析了外资航运巨头进入中国航运市场的现状,从而提出我国航运企业的应对之策。     

2006年世界船舶市场评述及展望

总结了近一年来世界经济的发展,在此大背景下对2006年的船舶行业进行了总结和回顾,并对未来市场进行预测.世界船舶行业在2006年出现一个显著特征,即在航运市场回落的情况下船舶建造市场出现了前所未有的兴旺景象,船舶交易出现价高量大的场面.究其原因,船厂任务已饱满、受新规范影响,成本进一步提高以及对后市航运市场看好等原因起到主要作用.鉴于目前订单情况及航运市场现状,预测未来船价还将保持高位运行,航运市场运力将得到进一步快速扩增,甚至会出现供大于求的局面,不过崩盘的可能性不会太大.     

Lessons from bankruptcy of Hanjin Shipping Company in chartering

This paper aims to analyze the charter contract management of major container shipping companies in response to fluctuations in shipping market conditions in terms of contract duration using data of containerships between 2010 and 2016. Duration analysis was conducted to examine the relationship between charter duration and shipping market conditions. Moreover, this paper explores the causes of Hanjin Shipping Company’s bankruptcy, drawing managerial implications. Test results from Cox PH (Proportional Hazard) model show that most container shipping companies in Europe having net earnings purchased large vessels instead of chartering vessels, while some ocean carriers featuring poor financial performance, in particular the Hanjin Shipping Company, chartered bigger ships with higher charter rates and longer duration. Contract charter rates and duration of Hanjin Shipping Company featured greater risk compared to competitors.     

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.     

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.     

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。     

浅析国际航运市场营销环境

分析研究了国际航运市场营销的环境,论述了航运市场的外部环境和内部环境及国际环境变化对航运市场的影响。     

Methodology for ro-ro ship and fleet sizing with application to short sea shipping

A novel methodology is developed for determining the characteristics of a cargo roll-on/roll-off (ro-ro) ship and the fleet size required for a given short sea shipping route. The ship and required fleet size to satisfy the transportation demand (for each pair of speed and freight rate) are determined using a database of existing cargo ro-ro ships to obtain the main technical characteristics of the most suitable ship. The time charter, voyage costs and revenue are then calculated considering the technical characteristics of each ship. Fuel costs are corrected for the actual ship speed and loading condition. A number of restrictions in the transportation problem are considered leading to the exclusion of unfeasible solutions. The maximum profit over the period of a year is identified among the feasible pairs of speed and freight rate. This general methodology is applied in a case study that considers the route between Leixões (Portugal) and Rotterdam (Netherlands). The study allows the identification of the most suitable ship and fleet sizes for different market penetration levels and quantifies the impact on shipping company profit of changes in parameters such as fuel costs, time charter costs, emission control area, installed propulsion power and stacking factor.