Work simplificafion through the tansformation of work on board

Through a series of research on 10 Japanese ships since 1961, it was found that the relationship between number of crew and the resulting structural change of work on board ship can be formulated by a linear regression. Some of the major findings that are obtained from this new method are summarized as follows. As the number of crew decreases, the proportion of work for operating the ship (manoeuving and controlling work) increases, while the proportion of work which is not directly related to the operation decreases. This structural change can be attributed to work simplification resulting from four types of the transformation of work:

(a) The replacement of man'al work by putting machines on board.

(b) The transformation of work on board into work done by machines on shore.

(c) The transfer of work previously done on board to the shore.

(d) The transformation of work within a ship.     

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.     

Economic policies and seaports: The economic functions of seaports

This paper argues that the economic functions of seaports are to benefit those whose trade passes through them, i.e. through providing increments to consumers' and producers' surpluses. Whilst recent developments in the technologies of seaports (containers, bigger ships, more rapid handling of bulk cargoes) have increased technical efficiency, they have also provided such economies of scale as to reduce some opportunities for competition and, therefore, the probability that cost reductions are actually passed on in this way. For this purpose port costs need to be considered in their entirety, i.e. as generalized transport costs per tonne, comprising money, time and the risks of loss, damage and delay. Such cost reductions will lead to expanded trade in a variety of ways.

This statement of the economic function of seaports is contrasted with views that they should try to increase employment in their locality, or that they should maximize profits.     

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.     

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.     

Potential port responses to new information systems on ships

Innovations in information technology, satellite navigation and hydrography are making it technically possible for commercial ships, run by very small crews, to be navigated in the world's seas and oceans with positional accuracies measured in tens of metres. If shipping lines do make the necessary investment in technological hardware, training, operational readjustments and data acquisition, and are also allowed to exploit the full potential of GPS, it will not be surprising if they then expect the ports to provide levels of information that allow the ships to exploit their new capabilities right up to the berth. Ports wishing to hold or improve their perceived service quality in the competitive port league will need to consider whether, and how, they can meet the shipping lines' requirements.

The introduction of strict product liability law adds a new dimension to the assessment of commercial risk in the various technological possibilities available to the ports. The possible costs involved in cases where third party data processors, software producers and electronic chart hardware manufacturers all stand between the port's data output and the user's perception and use of it, in a completely ephemeral form on a screen, need to be considered carefully. Simpler forms of data transmission, such as via traffic advice broadcast or by pilots in person may be seen as the more prudent choice in the five to ten year horizon.     

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.     

An analysis of decision-making processes in multicultural maritime scenarios

With three research studies recently carried out the pros and cons of multicultural, multilingual crews have given a 'second' food for thought:

• The Seafarers' International Research Centre (SIRC): 'Transnational Seafarer Communities' and the research, 'Finding a balance: companies, seafarers and family life', linked to this [1]. The latter presented in Maritime Policy & Management, no. 1, January-March 2003.
• The Swedish National Maritime Museum (SNMM): Isolde av Singapore [2]. This research and sociological documentation will be reviewed in a later issue of Maritime Policy & Management.
• Horck, J., 'A culturally mixed student body; the WMU experience in fostering future decision makers' [3].

There is a growing conviction among seafarers and persons working in the land-based sector of the maritime industry (including ex-seafarers) that staff onboard and on shore should be prepared to work with crews and groups whose members come from different countries and cultures and speak different languages. The problem, though, is which culture will have to surrender and which will dominate? Will a third culture become the norm for common survival? Perhaps to understand oneself and be knowledgeable about others is a better way to avoid eventual conflicts.

There are nearly no research findings on how a programme should comprise the aims of facilitating comprehension and appreciation of influences, from differences in cultural backgrounds, on group performance and decisions.

This paper reports on the research carried out on students in the Shipping Management and the Maritime Education and Training courses at World Maritime University (WMU). How do post-graduate students holding unlimited certificates of competency, as well as holders of university degrees with experience in the maritime industry and maritime administration, come to a consensus decision?

The findings in this research are discussed in balance with the results from both the SIRC and the SNMM research which is interesting because the results, in some significant issues, are not the same.

A phenomenographic approach has been used to find out that a multicultural group is not free from working problems. Can cultural differences, perhaps, be developed from an assumed hindrance into a catalyst for stimulating national appreciation and cooperation? Perhaps the opposite is true; it might be a bottleneck for improvements in safety as formulated in the STCW95 and the ISM Code.     

Designing optimal routes in a liner shipping problem

A real liner shipping problem of deciding optimal weekly routes for a given fleet of ships is considered and a solution method for solving the problem is proposed. First, all feasible routes for each ship are generated together with the cost and the duration for each route. The routes are given as input to an integer programming (IP) problem. By solving the IP problem, routes for each ship are selected such that total transportation costs are minimized and the demand at each port is satisfied. The total duration for the routes that are selected for a given ship must not exceed one week.

The real liner shipping problem is solved together with four randomly generated test problems. The computational results show that proposed solution method is suitable for designing optimal routes in several liner shipping problems.     

Alternative operational policies in short sea Ro-Ro transportation systems

This paper highlights the efect of several operating parameters that influence the short sea Ro-Ro transportation system. In view of the fact that many of the operating factors exhibit random variations a simulation model is constructed, the output of which is used for a simple economic model. The results for different alternatives are examined taking RFR as the basis of comparison.

Optimum solutions are found whenever possible. Some general conclusions on the relative economic superiority of the operating alternatives have been drawn. It is expected that the results and essentially the technique itself would be useful to designers, owners and operators of Ro-Ro ships and manufacturers of Ro-Ro equipment.     

A maritime productivity study 1859-1919

This is one of two papers designed to test the ability of a theoretical model of productivity measurement [1] with times series empirical data. The analysis was able to identify trends in productivity growth for sailing ships and stcamships. scparating long and short run components . One of the interesting features of the findings is that the long run growth rate is the same for both sailing and steamships. Although sail and steam appear to be two unique technologies, it is found that technologica progress is evolutionary not revolutionary.

The techique using covariance analysis proved useful for times series productivity measurement.     

Maritime liner shipping and the stevedoring industry: market structure and competition strategies

Globalization, liberalization, competition and spatial interaction are significant factors affecting the transformation of manufacturing industries worldwide. In the transportation and logistics industry, however, cooperation is becoming even more critical than competition in determining firms' efficiency. Cooperation has always characterized the liner sector in which strategic alliances, mergers and acquisitions have generated twin effects: notable increases in ship size and falls in freight rates. Meanwhile, the stevedoring industry is undergoing privatization-driven consolidation and the emergence of global pure terminal operators. This article focuses on vertical integration between global carriers and terminal operators. We address the following key current issues:

• dedicated terminals as a strategy for cutting costs and controlling integrated transport chains;
• the struggle for supply chain control, involving global carriers versus global terminal operators, driven by financial power and technical and managerial capability.

We close analysing one of the core problems of the market, namely the evolving role of the dedicated terminals. For the pure stevedores they represent an opportunity to secure a cargo, while in the hands of the liners they enable cost stability and the possibility to put pressure on pure terminal operators.     

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.     

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.     

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.     

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?     

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.     

1981 air-cargo market penetration

This paper examines the depth of air-cargo market penetration being made in the UK by the air-transport industry, following the collapse of I.A.T.A.-constructed fares a nd rates in the wake of de-regulation on the US domestic market in 1978.

It looks at statistical evidence from H.M. Customs and Excise for 1978, 1979 and 1980, and in particular makes a distribution costs analysis by comparing sea and air costs together. In the current economic climate, given today's freight rates and the fact that air-freight is rapidly turning towards bulk unitization with a frequent scheduled delivery service, a reassessment of company distribution costs could be financially beneficial to many exporters traditionally using sea transport.     

Maritime language: quest for simplicity

This brief paper examines some of the problems of interpretation of documents and procedures given in English faced by non-English seafarers, and suggests the use of 'controlled' English to simplify these problems.

' Speak English ', said the Eaglet, ' I don't know the meaning of half those long words, and what's more, I don't believe you do either. '

Alice's Adventures in Wonderland

Lewis Carroll     

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.