Advances in Maritime Logistics and Supply Chain Systems

The following sections are included:

• CONTENTS

• PREFACE

Historically, almost all goods transported worldwide have been carried by sea with the current estimate stands at approximately 90 percent by volume and 70 percent by worth. Maritime industry is an important economic sector as it has a direct impact on the prosperity of a region and/or city. This chapter presents a review on maritime trade evolution in Asia from the thirteenth centuries to the post-World War II, followed by an examination on the contemporary development of some major Asia ports. From the extant port literature, a list of factors affecting port competition and development is identified and reviewed. The chapter concludes with brief discussions on fruits for thought, future trend, challenges and opportunities facing the Asia maritime trade industry.

The economic crisis from the end of 2007 to early 2010 has greatly affected the maritime industry. Some of the biggest problems include oversupply of tonnage, sudden drop in demand, and declining freight rates.

Global containerized trade enjoyed a year-on-year increase of 4.6 percent in 2008. The liner shipping market accounts for 16 percent of the world's trade goods loaded in terms of tons. One of the most significant trends in liner development is the increase in vessel size. There are notable increases in both the size of the largest vessel and the average vessel size. The productivity of most container lines, however, decreased in 2008, partly due to the various cost control measures adopted by carriers, such as slow steaming, to mitigate the effect of the crisis. Freight rates also suffered in 2008 and 2009. With demand recovering in 2010, freight rates have increased, and have even reached pre-crisis levels in some trade routes.

For container terminals around the world, global operators are still the market leaders and this trend is likely to continue. Container transshipment activities have enjoyed rapid growth during the 1990s, and the share of transshipment activities in total container volume has reached equilibrium from 2000 onwards. There were some notable improvements to port performance in 2008. The United Nations' Liner Shipping Connectivity Index 2009 has clearly shown the effect of the crisis in the industry.

Hong Kong port (HKP) had been the world's busiest container port during the 1990s and early 2000s. However, in recent years, its growth slowed down due to rising competition from mainland ports. This paper identifies that potential relocation of its key cargo source, processing trade enterprises, may also have fundamental impacts on HKP development. Scenario analysis is conducted to understand the relationships between business environment factors and potential relocation trends using a mixed integer programming (MIP) model. It suggests production operations are likely to move to Pan-PRD and lower cost areas of Guangdong if business environment does not deteriorate much further. However, continual appreciation of Chinese currency RMB and further reduction of value-added tax (VAT) rebate in China will make Asian lower cost countries more competitive. Very low oil prices will favor Inland of China. Very high oil prices will cause global manufacturing move near major markets. Processing trade relocation to western Guangdong will be slightly favorable to HKP development, while other relocation scenarios will adversely affect HKP development.

The trend of increasing globalization of the world's economies and the relentless development of international trade links has resulted in a great boom in many transportation industries, notwithstanding the recent economic downturn. Sea container traffic accounts for the majority of international trade due to its cost-effectiveness and as such maritime transportation is vital for the economic health of many nations. The container transportation industry has therefore experienced great growth, resulting in intense competition among international container ports. In such a competitive environment, port benchmarking has become particularly important for individual ports as it can help them recognize potential threats and opportunities as well as reveal their strengths and weaknesses in the face of the ever-changing competitive landscape.

This paper focuses on port benchmarking from the following three perspectives: port efficiency, port connectivity, and the impact of various factors on individual ports. First we present a brief review on the study of port benchmarking in recent years. Next, we examine the aforementioned three perspectives by presenting a model and a case study for each model. Efficiency is an important factor in port competitiveness, and by using Data Envelopment Analysis methodology many port attributes can be evaluated in terms of their impact on port performance. Port connectivity indicates how well ports connect to others in the actual maritime transportation network and is vital for the competitiveness of transshipment services at a port. However, to date this concept has not yet been clearly defined. A port connectivity analysis framework is proposed in this paper and under this framework this concept can be characterized in terms of the impact of transshipment operations at a port on the overall network. Lastly, many factors can influence a port's performance and competitiveness and a given factor can play different roles for different ports. The complex interplay of factors in port systems can make it difficult to study the impact of individual factors on the port. A network flow model is presented to analyze the impact of different factors on different ports. As Asia-Pacific is the pre-eminent region in terms of world container throughput, this paper focuses on the benchmarking analysis of major ports in the Asia-Pacific region in order to provide some insights into the performance of these ports.

This paper investigates the question: is port throughput a port output in port economic production and cost functions? The paper concludes that the answer to this question is no. Port throughput is the amount of cargo received from carriers that passes through the port. A port does not produce throughput but rather provides interchange service for the cargo that it receives. By using port throughput as a measure of port output (or the dependent variable) in a port's interchange service economic production function: (1) the interchange service economic production function no longer exists and (2) the port's long-run total cost and short-run variable economic cost functions cannot be derived. A measure of port interchange service that is consistent with measures used heretofore by ports for evaluating their performance is the port throughput ratio — the ratio of cargo interchanged to the total time incurred in interchanging the cargo.

This paper investigates the factors that contribute to the decisions of companies from key maritime sectors to be established in a specific area that evolves into a network of firms. It is also the scope of this paper to investigate and benchmark the circumstances under which a network of firms is transformed into a competitive Maritime Cluster. In this framework we present methods for developing and evaluating possible models for the Cluster creation and development, addressing more specifically the case of Piraeus. The concentration of the research on the Greater Area of Piraeus as opposed to the whole country is considered given that the country's major port is located in the Greater Area of Piraeus which constitutes a very active maritime community. Furthermore, the paper will give a short introduction into new computational methods such as Agent Based Modelling for simulating the networking process within maritime clusters and managing their life cycle. This will give an insight of firm survival strategies within the cluster, optimum timing for new entrants in the cluster and overall cluster management.

Owing to the paradigm shift from the make-to-stock (MTS) to the make-to-order (MTO), it was imperative to integrate the front-end market information for automotive supply chain. As a linkage between manufacturers and consumers, the performance of automobile dealers secured a crucial role in the automotive market-place. Accordingly in this study, a novel performance evaluation strategy has been developed for the automotive supply chain regarding four dimensional criteria, i.e., the financial condition, customer satisfaction, internal processes and self-innovation. More specifically, the balanced scorecard method was initially applied to evaluate the dealers' performance. Subsequently, a survey was conducted for the next-step evaluation. Consequently, the analytic network process (ANP) technique was employed to analyze the surveyed data. To this end, this strategy assisted automobile dealers in achieving both short-term and long-term objectives. Compared with traditional performance evaluation strategies, this approach could eliminate such disadvantages as time delaying and benefit orientation.

Container terminals, including shipping and land transportation, secure a crucial position in container transportation. In particular, container yard management, which involves diverse operational services, significantly affects the operational efficiency of the entire container terminal. Therefore, it is imperative to attain an efficient strategy to support the yard allocation for export containers. In this paper, a yard allocation model via objective programming was initially postulated based on a rolling-horizon strategy, which aims at allotting export containers into yard. Accordingly, the model's objective functions were subject to the minimum total distance of container transportation between storage blocks and berthing locations. This could balance the workloads amongst blocks. To resolve the NP-hard problem regarding the yard allocation model, a hybrid algorithm, which applies heuristic rules and genetic algorithm (GA), was then employed. Afterwards, a simulation model, which embeds the yard allocation model and algorithm, was developed to evaluate the proposed system. Subsequently, a case study was used for system illustration and simulation. Consequently, it could be found from computational results that this approach paves a venue for resolving the container yard allocation problem.

Rail links in sea-terminals are often separated by several means: fences, barriers, special gates, costly haulage to overcome the interfaces. Some earlier solutions are dealt with — like to put a quai-track underneath the gantry crane to get direct transfer of containers. It will be shown in the paper that this solution is not state of the art for various reasons, the most important is that the gantry crane loading/unloading a 10,000 TEU vessel is not prepared to move forward and backward just to put the right container on the right wagon. The solution has to be found by including shuttle trains in the AGV regime of the terminal for better productivity and sufficient flexibility. The paper will outline which criteria to be dealt with to achieve that goal of better economic performance.

For port planning purposes the development of the size of containerships is of great importance. Parties involved continuously try to beat competitors by creating the possibility to accommodate ships bigger than existing ones. With information available on vessel particulars and new building prices for fully cellular Post-Panamax container ships reaching up to about 14,000 TEU it is possible to conduct a proper statistical analysis of economies of ship size. Results show that economies of ship size, expressed as the elasticity of costs as a function of ship size, differ only slightly from those of ships up to Panamax.

The assessment of economies of ship size is similar to the one used by Ryder and Chappel (1979), Jansson and Shneerson (1987) and Cullinane and Khanna (1999) and (2000) and results show similarities and differences. Wijnolst et al. (1999) created a push in thinking about the role of much bigger ships with their Suez-Max and Malacca-Max designs and results are compared.

Economies of ships size act as the motor of demand for bigger ships. In order not to lead to too high user costs the increase in size has to be in balance with the combined increase in trade volumes and the number of port pairs between coast lines to be connected. The conclusion is that the ongoing increase in ship size will continue.

In this paper, we focus on the liner Ship fleet planning (LSFP) with cargo demand uncertainty. The LSFP aims to determine which type of ships and how many of them are needed, and how to deploy and operate these ships. We first propose a mixed integer nonlinear programming model for the LSFP by taking into account cargo shipment demand uncertainty. We find that the fuel consumption cost of a ship can be approximated by a linear function with respect to its cruising speed, and we then proceed to build a mixed integer linear programming model that can approximate the originally proposed nonlinear programming model. The mixed integer programming model can be thus effectively solved by some optimization solvers. Finally, numerical examples are carried out to assess the linearized approach.

Emissions from commercial shipping are currently the subject of intense scrutiny. Various analyses of many aspects of the problem have been and are being carried out and a spectrum of measures to reduce emissions is being contemplated. However, such measures may have important side-effects as regards the logistical supply chain, and vice-versa. Industry circles have also voiced the concern that low-sulphur fuel in SECAs (the so-called ‘sulphur emissions control areas’) may make maritime transport (and in particular short-sea shipping) more expensive and induce shippers to use land-based alternatives. A reverse shift of cargo from sea to land might ultimately increase the overall level of CO₂ emissions along the intermodal chain. This paper takes a look at various tradeoffs and may impact the cost-effectiveness of the logistical supply chain and present models that can be used to evaluate these tradeoffs. One of the key results is that speed reduction will always result in a lower fuel bill and lower emissions, even if the number of ships is increased to meet demand throughput. Another result is that cleaner fuel at SECAs may result in a reverse cargo shift from sea to land that has the potential to produce more emissions on land than those saved at sea. Various examples are presented.

Future market freight levels have always been a critical question in decision support processes. FORESIM is a simulation technique that models shipping markets (developed recently). In this paper we present the application of this technique in order to obtain useful information regarding future values of the tanker market in numerous states of OPEC oil production levels. This is the first attempt to express future tanker market freight levels in relation to current market fundamentals and future values of demand drivers. We follow a systems analysis seeking for internal and external parameters that affect market levels. Therefore we apply dynamic features in freight estimation taking into account all Tanker market characteristics and potential excitations from non systemic parameters as well as their contribution to freight level formulation and fluctuation. In this way we are able to measure the behavior of future market as long as twelve months ahead with very encouraging results. The output information is therefore useful in all aspects of risk analysis and decision making in shipping markets.