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DEVELOPMENT OF FLEET OF CONTAINER SHIP

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• Economies of scale in ship capacity

• T he logistics of container transport networks

• The formation of shipping pools, consortium and alliances

• Routes selection criteria

• Liner conference system

• UN liner code

• Related government policies

LINER

a) Ply along a fixed route on a regular schedule service between group of ports

b) Offer cargo space to all shippersc) Liner operation involves adequately sized fleet d) Designed to carry general cargoe) Operate both deep and short sea servicesf) Large volume of such cargo is container vessels

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Economies of Scale in Ship Capacity

The concept of mother vessel/feeder vessel.

Vessel sizes/capacity/volume/slots .

Classification by generation.

Various types of containers/container cranes.

Top Twenty Ports and ship owners associated with container

trade.

Type of Vessel Capacity Teus

DWT Length m Beam m

Max. Row

Draft

1st. Generation<1,000 16,000

180 –

19020 8 9.5

2nd. Generation 1,000 – 2,999 24,000 200 – 250 31 12 11.0

3rd. Generation 3,000 – 3,999 48,000 250 - 280 32.2 13 12.5

4th. Generation 4,000 – 5,999 58 ,000 280 - 290 39.6 16 13.5

5th. Generation 6,000 – 8,000 89,000 290 - 338 46.0 17 - 18 14.0

6th. Generation12,000

- 18,000

120,000 -

180,000400

50.0-

60.0

20-

24

17.4-

21.0

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Classification by Generation

Classification of Containership

Type of Vessel

Capacity Teus

# Row Abreast

DWT Length M

Beam M

Draft M

Speed Knots

Barges 60 - 100 <10 2,200 45 16 4.3 12

Feeders400

– 2,999

10-12 7,000 120 20 6.75 15

Panamax3,000

– 3,999

13 48,000250

-280

32.2 12.5 22

Post –

Panamax

4,000 –

5,99916 58,000

280 -

29039.6 13.5 25

Super Post – Panamax

6,000 –

8,00017 - 18 89,000

290 -

33846.0 14.0 25

Mega12,000

– 18,000

20 -24120,000

– 180,000

40050 -

60

17.4 –

21.025

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Container Cranes

o 1st – 2nd Generation – design to handle first and second generation ships with containers stacked not more than 13 rows abreast.

o 3rd Generation – designed to handle containership (panamax) with 13 row abreast and a permissible restricted beam to 32.26 m and draft of 12 m.

o 4th Generation – designed to handle containerships (post-panamax) capable of stacking 16 rows abreast.

o 5th Generation – designed to handle containerships (super post – panamax) of 17 or 18 rows abreast.

o 6th Generation – mega – cranes designed to handle mega – containerships with 20 – 24 rows abreast.

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Types of Containers

4.1 General Purpose

Widely used, mainly for general purpose:

Made of steel, fully enclosed and is loaded or discharged

through a set of full rear door.

Floor – covered with timber planking or plywood and cargo lashed along the side at floor level

Suitable for general breakbulk cargo such as machinery, marbles, timber, paper products.

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4.2 Refrigerated Containers

Fibre – glass and aluminium containers equip with

refrigeration units and power points.

Used to store perishables such as fruits, vegetables,

fish, meat, ice – cream and wax.

Containers are insulated and are capable of holding

specific temperatures of down to -40’C.

Some are equipped with devices to pre – set the

humidity to suit the cargo.

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4.3 Ventilated or Aerated Cargo Containers

Resemble GP but designed to provide continuous ventilation for cargo e.g. coffee.

Ventilation – a series of holes along the top and bottom side rails of the container.

e.g. of foodstuff: onions, coffee, and potatoes, cocoa.

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4.4 Pen Containers Dry boxes for transportation of

livestocks

Proper ventilation and barricades are needed

Ventilation with nets and barricades facilitating animals to be fed.

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4.5 Tank Containers

Designed for the carriage of liquids.

Consist of cylindrical tans made of stainless steel surrounded by framework.

Products – range from portable spirits and hazardous chemical.

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4.6 Flat Rack Containers

Open top / Open side containers.

Roof panel and side walls are removed.

Only end walls are left.

Capable of handling cargo through the top, fronts rear or right opening.

Suitable for machinery, vehicles and forestry products whose dimension exceeds those of a GP.

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4.7 Over – Width Containers

Dry boxes without the side panels to cater for a single – piece cargo that are wider than 8 feet.

Cargo has to be lashed to the floorboard of the container.

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4.8 Collapsible Containers Flat rack containers made up of flat bed and

two upright ends, which are collapsible.

Purpose: to save space on board.

Not very popular due to high purchase cost and time taken to set up containers.

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4.9 Bulk Container

Designed to carry free – flowing cargo.

Cargo loaded through hatches in the roof and cargo discharged through hatches in the door or front end by tipping the container.

Examples are: beans, wheat, solids pasture, sugar, cement, cereals and fertilizers.

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4.10 Hide Containers Used for transportation hides.

Normally, provided with tanks beneath the floors for collecting hide juice flowing out from the hides.

Many made from fiberglass panel (FGP) due to ease of cleaning.

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4.11 Hardtop or Open Top Containers Hardtop – has the same dimension as GP

but has removable hard top.

Roof may be lifted off by a forklift truck.

Suitable for heavy loads that are loaded or removed from the top such as steel products and sheet glass.

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4.12 OH Containers

Dry containers without roof panel.

Enables tall single piece cargo to protrude beyond the roof level.

Attract extra freight charges when carried on board.

Examples: tall machinery.

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4.13 Half Height Containers

Open top with a standard length and width but only 4ft. 3 inches high.

Suitable for the carriage of dense cargo such as scrap metal, steel bars, pipes and stone.

2 HH can occupy one cell in the container ship.

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4.14 Porthole Containers

A shipping container with insulation and two apertures or portholes.

Portholes meant for air of the correct temperature be delivered to the cargo.

From container terminal’s refrigeration unit or from clip – on unit.

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4.15 Platform Containers

Carrying non – containerisable goods in top stow.

Can be stowed either longitudinally or transversely on the platform.

Most suitable for overlength or overwidth cargo.

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DG Containers• Information needed:– Name of vessel– Port of loading – Port of discharge– Correct technical name of substances– Qty – gross and net weight in kg.– Description of packing– Classification of substance (IMDG code)– Properties of substances – UN number

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CONTAINERIZATION

Containerization is a method of distributing merchandise

in a unitized form thereby permitting an intermodal transport

system to be evolved i.e combination of road, rail, air, and maritime

transport

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Containerisation – Advantages / Disadvantages

Advantages:

Permits a door-to-door service.

No intermediate handling of cargo at terminal transhipment point.

Less risk of cargo damage and pilferage.

Less packing needs at terminal for containerized shipments.

Better cargo condition at receivable point when compared to

conventional handling.

Quicker transit time compared with conventional vessels.

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Encourage trade development and permits quicker payment of

export invoices.

Containerization enable fleet rationalization.

Faster transit and reliable schedules.

Quick turnaround time enable rationalisation of ports of call.

Provision of through documentation.

Provision of through rate.

More reliable transit.

Development of new container markets.

Containerisation – Advantages / Disadvantages…cont

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Disadvantages:

Capital intensive project.

Not all merchandise goods can be containerised.

Container itself is a high capacity carrying unit.

Not all trade have good containerisable cargo base.

Complex task in ensuring full utilisation of equipment.

Require good infrastructure for hinterland connection.

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SHIPPING TRADE ROUTES CROSS ROUTES & CHOICES OF

ROUTES/SELECTION CRITERIA

29The “Shape” of the Future Environment

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Container Traffic (in thousand TEUs):Rank Port Country 2010 2009 2008 2007

1 Shanghai China 29,069 25,002 27,980 26,150

2 Singapore Singapore 28,431 25,866 29,918 27,932

3 Hong Kong China 23,699 20,983 24,248 23,881

4 Shenzhen China 22,510 18,250 21,414 21,099

5 Busan South Korea 14,194 11,954 13,425 13,270

6 Ningbo China 13,144 10,502 11,226 9,349

7 Guangzhou China 12,550 11,190 11,001 9,200

8 Qingdao China 12,012 10,260 10,320 9,462

9 Dubai United Arab Emirates 11,600 11,124 11,827 10,653

10 Rotterdam Netherlands 11,140 9,743 10,784 10,791

11 Tianjin China 10,080 8,700 8,500 7,103

12 Kaohsiung Taiwan 9,180 8,581 9,677 10,257

13 Port Klang Malaysia 8,870 7,309 7,970 7,120

14 Antwerp Belgium 8,470 7,309 8,663 8,176

15 Hamburg Germany 7,910 7,007 9,737 9,890

16 Tanjung Pelepas Malaysia 6,540 6,000 5,600 5,500

17 Los Angeles United States 6,500 6,748 7,850 8,355

18 Long Beach United States 6,260 5,067 6,350 7,316

19 Xiamen China 5,820 4,680 5,035 4,627

20 New York/New Jersey United States 5,290 4,561 5,265 5,299

World Busiest Ports

The Leading World Carriers

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SHIPPING POOLS, CONFERENCE AND

ALLIANCES

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What is conference System?

A formal or informal organization whereby:

• Ship owners offer their services on a given sea route on conditions agreed by members.

• Semi – monopolistic association formed to restrict internal and external competition.

• Earnings are pooled.• Prices are controlled by limiting new entries.• Common tariff of freight rates are established • Members are free to compete for traffic based on quality and

efficiency of their services.

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Advantages of Shipping Conferences

Avoidance of wasteful competition

Members have good chance of profitability

Stables rates facilitate manufacturers to make forward contract

for carriage of goods.

Regular and frequent sailing enable manufacturers to plan

ahead based on JIT

Equal treatment to all shippers by members

Economic of large scale operations

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Disadvantages of Shipping Conferences

Tied to a particular conference.

Cannot take advantage of tramp tonnage when rates are low.

Cannot use bargaining power to reduce rates.

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Shipping Alliances How it Happen?• Conferences – slot purchases, slot exchange, vessel sharing or joint

services emphasize trade – specific

• Conferences ARE OUT – DATED e.g. on partner for transpacific trade but another for Asia – Europe trade.

• Shipping companies are under intense pressure to compete and ensure fast transit time and high frequency of sailing and low cost. Development of increasingly large ships to obtain economies of

scale. Alliances and mergers / acquisitions of carriers as strategies for

rationalization e.g. spread risk and reduce administrative costs.

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Impact of Alliances 20 largest carriers now control around 56% of world

container fleet. Top five lines owns or operate more than 25% Shippers have benefited from improved frequently

and reliability of service as well as containment of freight rates.

Container throughput is growing more quickly at hub ports and newly emerging ports.

Top 20 ports handled 56% (96.4 m teus) of world container trade.

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Impact of Alliances 10 busiest ports handling 68% (61.6 m teus) of Asia

– Pacific regions total throughput. International terminal operators are extending the

scope and scale of their activities:• PSA operates in 10 terminals• HPH operates 8 terminal, other than in Hong

Kong and China• P&O operates 21 terminal and handling

7 m teus / year.

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UN Liner Code 40% of the cargo will be reserved for each of the

maritime countries participating in the trade with the residue of 20% to the established liner conference in the cross trade

40/40/20 conference code is strongly opposed by Westerners

Conference must operate without government intervention

Conference must be subject only to fair competition

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Related Government Policy

Control of freight rate Cabotage Policy Flag discrimination Subsidized fleet, port charges Preferred/favoured national shipping line Affect Balance of Trade Pitfall/drawback retaliation Unfair competition

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THANK YOU