Maritime Logistics

Subject: Logistics Management

1

Presentation Flow

1. Introduction

2. Overview of the role of sea trade in economic

development

3. Basic information on the merchant fleet 3. Basic information on the merchant fleet

4. Ship types

5. Ports

6. International maritime-and-related organizations

2

Definition

• Maritime Logistics Management is the part of

the supply chain process that plans,

implements, and controls the efficient,

effective flow and storage of goods, services,effective flow and storage of goods, services,

and related information from the point of

origin to the point of consumption in order to

meet customers’ requirements in the

Maritime and business environments

3

History

• Egyptians used it in 3200 BC

• Maritime transport was dependent on wind

• Mechanized ships started in mid 19th century(steam • Mechanized ships started in mid 19 century(steam

engine)

• Diesel engine introduced in 20th century

• Today 90-95% of of international trade is carried

onboard ships of some sort

4

Characteristics

• Cheap Conveyance

• High carrying capacity

• Longer transport time• Longer transport time

• Affected by weather factors

• Delays on port where loading and unloading is

done

5

Operation

• Liner Shipping

• Tramp Shipping• Tramp Shipping

• Industry Shipping

6

Sector Specific Targets

• Job creation

• Social development

• Increasing maritime

awareness

• Labor standards

7

Main Concerns of Maritime Industry

• Maritime business is to be conducted according to

the changing pattern in international trade and

global logistics and supply chain

• The rule of games is changed –larger and fewer • The rule of games is changed –larger and fewer

players hold the ever-stronger market power

• New strategies are to continuously develop and

implement to be competitive and sustainable

• Successful integration into the global supply chain is

the key to their business

8

Effect of Global Slowdown

2008:

• Global Economic

Downturn continues

• Sharp decline in world • Sharp decline in world

merchandise trade

• Growth in international

seaborne trade slowed

down to 3.6 % (2008) from

4.5 % (2007) 9

Growth in the volume a of merchandise trade, by

geographical region, 2006–2008 (%ages)

10Source: WTO Press Release: World Trade 2008, Prospects for 2009

Indices for world economic growth (GDP), OECD Industrial

Production Index

and world seaborne trade (volume), 1994–2009

(1994 = 100)

11

Indices for world economic growth (GDP), OECD Industrial

Production Index

and world seaborne trade (volume), 1994–2009

(1994 = 100)

Source: UNCTAD Review of maritime transport 2009

12

Sea Borne Trade

• 2008 international seaborne trade at 8.17 billiontons of goods loaded,

• With dry cargo continuing to account for thelargest share (66.3 per cent)

Major loading areas were located in • Major loading areas were located in

1. Developing regions (60.6 per cent)

2. Developed economies (33.6 per cent)

3. Countries with transition economies ( 5.9 per cent)

13

World seaborne trade in 2006–2008, by type of cargo

and country group

1460.6

33.6

5.9

World seaborne trade, by country group and region,

2008

(percentage share in tonnage)

15Source: UNCTAD Review of Maritime Transport, 2009

Lloyd MIU Study

16

Maritime Transportation Planning Problem

• Low visibility

• Less structured

• Much More Uncertainty

• Traditional & Fragmented

17

Strategic Problems

Among the strategic problems:

• Market and trade selection,

• Ship design,

• Network and transportation system design (including • Network and transportation system design (including

the determination of transhipment points for

intermodal services),

• Fleet size and mix decisions (type, size, and number

of vessels), and

• Port/terminal location, size, and design

18

Tactical Problems

The tactical problems include:• Adjustments to fleet size and mix,

• Fleet deployment (assignment of specific vessels to trade routes),

• Ship routing and scheduling,• Ship routing and scheduling,

• Inventory ship routing,

• Berth scheduling,

• Crane scheduling,

• Container yard management,

• Container stowage planning,

• Ship management, and

• Distribution of empty containers

19

Operational Problems

The operational problems involve:

• Cruising speed selection,

• Ship loading, and• Ship loading, and

• Environmental routing

20

Maritime supply chain applications

A tactical transshipment problem, where coal is transported at sea from several

supply sources to a port with inventory constraints. The coal is then transported

from the port to several coal fired power plants.

• Objective is to minimize:– Procurement costs,

– Transportation costs, and – Transportation costs, and

– Holding costs.

• Constraints:– Company procurement policy,

– Power plant demand,

– Port unloading capacity,

– Blending requirements, and

– Safety stocks.

21

Basic information on the merchant fleet

General cargo vessels

Container ships

Dry bulk carriers

Liquid bulk carriers

Gas tankers

Ship types

Liners

Tramps

Cruising ships

Special vessels22

General Cargo Vessels

"cargo" refers to the goods carried aboard the

ship for hire

A cargo ship or freighter is any sort of ship or vesselA cargo ship or freighter is any sort of ship or vessel

that carries cargo, goods, and materials from one port

to another.

23

Container ships

Cargo ships that carry all of their load in truck-size intermodal

containers, in a technique called containerization

Common means of commercial intermodal freight transport

24

Dry Bulk Carriers

The term “Dry bulk carrier" is used to distinguish bulkers from

bulk liquid carriers such as oil, chemical, or liquefied petroleum

gas carriers

Specially designed to transport unpackaged bulk cargo, such as

grains, coal, ore, and cement in its cargo holds

�Bulkers make up 40% of the

world's merchant fleets

�Range from single-hold mini-

bulkers to mammoth ore ships

able to carry 365,000 metric tons

of deadweight (DWT)

25

Dry Bulk Carriers

Typical bulk carrier crew

Captain/Master

Deck

department

Engine

department

Steward's

department

1 -Chief Officer

1 -2nd Officer

1 -3rd Officer

1 -Boatswain

2 – 6-Able Seamen

0 – 2-Ord. Seamen

1 -Chief Engineer

1 -1st Asst. Engr.

1 -2nd Asst. Engr

1 – 2-3rd Asst. Engr.

0 – 2-Jr. Engr.

1 – 3- Oiler

0 – 3-Greaser/s

1 – 3-Entry-level

1-Chief Steward

1-Chief Cook

1-Stwd's Asst

26

Liquid Bulk Carriers

"wet" trades of

• Petroleum

• Liquefied natural gas (LNG)

• Gasoline

• Chemicals

• Liquid edibles (vegetable oil, cooking oil, fruit juices, etc.)• Liquid edibles (vegetable oil, cooking oil, fruit juices, etc.)

27

Gas Tankers

An LNG carrier is a tank ship designed for transporting

liquefied natural gas (LNG)

28

Liners

Ocean liner is a ship designed to transport people from one

seaport to another along regular long-distance maritime

routes according to a schedule.

Liners may also carry cargo or mail, and may sometimes be

used for other purposes (e.g., for pleasure cruises or as

troopships).troopships).

29

Tramps

•A ship engaged in the tramp trade is one which does not

have a fixed schedule or published ports of call.

•As opposed to freight liners, tramp ships trade on the spot

market with no fixed schedule or itinerary/ports-of-call(s).

30

Cruising Ship

•A cruise ship or cruise liner is a passenger ship used for

pleasure voyages

•Major part of the tourism industry, accounting for U.S.$27

billion annually

31

Cable Ship

Fishery

Protection

Vessel

Special Vessels

Icebreaker Ship

Heavy Lift

Ship

Drill Ship

32

Cargo Loading Problem

Volume capacity

(cubic feet)

50 250 500

Weight 400 1000 2500

A B C

Containers

33

Weight

Capacity(Kg)

400 1000 2500

Contribution

(Rs.)

500 2000 4500

Objective : To determine number of cargo units of each type so as to Max. total

contribution subject to capacity restriction for carrier

Cargo capacity of ship constrained both by Max. Volume of 50,000 cubic feet

& Max. Weight of 2,50,000 Kg

Constraints:

Cargo Loading Problem(contd.)

34

How to solve?

Sol: Formulate as LPP

(OR Application)

� A facility for receiving ships and/or transferring cargo

� At the edge of an ocean, sea, river or lake

� Cargo-handling equipments, processing facilities,

Port

� Cargo-handling equipments, processing facilities,

custom facilities

� Port types – cruise, cargo ,

fishing, etc.

35

�Global trade structure or the transport industry

�Industrial relocation and boom in world production -

increased the tonnage supply and maximising cargo unitisation

�From labour intensive to capital intensive businesses

Port and Economic Development

�Integrated and continuous transport chain – from producer

to consumer

�Production required raw material from one country,

warehousing in another and exports to a third one

36

Port Infrastructure Efficiency Measures

37

� In world - Singapore, Shanghai, Rotterdam (Netherlands),

Kobe(Japan), Hong Kong (Total cargo tonnage)

� In India, 12 major ports and 185 notified minor and intermediate

ports - as per administrative significance

� Vishakhapatnam, Cochin, Kolkata , Chennai, Kandla, Ennore,

Major Ports

� Vishakhapatnam, Cochin, Kolkata , Chennai, Kandla, Ennore,

Jawaharlal Nehru Port, Haldia , Marmugao, Mumbai, New

Mangalore, Paradip, Tuticorin and Mundra

Jawaharlal Nehru Trust Port, Navi Mumbai (9)

Singapore port(40)

Rank Port Country 2008 2007 2006 2005 2004

1 Singapore Singapore 29,918 27,932 24,792 23,192 21,329

2 Shanghai People's Republic of China 27,980 26,150 21,710 18,084 14,557

3 Hong Kong Hong Kong 24,248 23,881 23,539 22,427 21,984

4 Shenzhen People's Republic of China 21,414 21,099 18,469 16,197 13,615

Major Ports in the world

5 Busan South Korea 13,425 13,270 12,039 11,843 11,430

6 Dubai United Arab Emirates 11,827 10,653 8,923 7,619 6,429

7 Ningbo People's Republic of China 11,226 9,349 7,068 5,208 4,006

8 Guangzhou People's Republic of China 11,001 9,200 6,600 4,685 3,308

9 Rotterdam Netherlands 10,784 10,791 9,655 9,287 8,281

10 Qingdao People's Republic of China 10,320 9,462 7,702 6,307 5,140

(in ‘000 TEUs )

39

Major Ports in the world

Major Ports in India

NameCargo Handled (06-07)

'000 tonnes% Increase (over 05-06)

Kolkata(Kolkata Dock System &

Haldia Dock Complex)55,050 3.59%

Paradip 38,517 16.33%

Visakhapatnam 56,386 1.05%

Chennai 53,798 13.05%Chennai 53,798 13.05%

Tuticorin 18,001 05.03%

Cochin 45,314 20.28%

New Mangalore Port 32,042 -06.99%

Mormugao 34,241 08.06%

Mumbai 52,364 18.50%

J.N.P.T. 44,818 18.45%

Ennore 10,714 16.86%

Kandla 52,982 15.41%

All Indian Ports 463,843 9.51%

41

42

43

44

45

46

47

48

49

50

51

52

� A system of intermodal freight transport using standard

intermodal containers

� Loaded onto container ships, railroad cars, planes, and trucks

� Approximately 90% of non-bulk cargo worldwide

Containerization

� Five common standard lengths – 20 ft, 40 ft, 45 ft, 48 ft and

53 ft

�Issues

�Increased Efficiency

�Additional Fuel Cost

�Misuse – Smuggle

�Empty containers53

�Cannot be built overnight and may take a lifetime to repay

�Poor connectivity to international transport networks

�Tended to absorb excess capacity in low-skilled labour

Issues in Port Logistics

�Managing ports superstructure becoming more

sophisticated and demanding

�Governments facing resistance for developing ports.

�Upgrading infrastructure according to modern technology

54

TradeoffsMarketCapabilities

•Used in U.S. Great Lakes,

rivers; EU rivers; China

and SE Asia and

elsewhere

•Limited accessibility,

other transport required

to/from port

•Slow travel (trains faster

but higher cost)

•Huge, heavy loads

hauled for distances

•Low-value, high-density

cargo such as coal or

Snapshot

•Waterways maintained

by taxpayers

•Low fixed costs for ease

of entry, private fleets

but higher cost)

•Harmful to

environment

cargo such as coal or

grain

•Very low per-mile cost

and fuel-efficient

55

International Maritime

Organization(IMO)

� Formerly known as the Inter-Governmental Maritime Consultative Organization (IMCO), was established in Geneva in 1948

� Came into force ten years later, meeting for the first time in 1959

� The IMCO name was changed to IMO in 1982

� Presently Headquartered in London, it’s a specialized agency of the United Nation with 168 Member States and three Associate Members

56

Organizational Structure

1.Governing Bodies

2.Secretary General

3.Technical Committees

3.1 The Marine Environment Protection Committee3.1 The Marine Environment Protection Committee

3.2 The Legal Committee

3.3 The Technical Cooperation Committee

3.4 The facilitation Committee

4. The Maritime Safety Committee

57

58

Main Objectives

• To Ensure Safe secure and efficient shipping

on clean Ocean

• To develop and maintain a comprehensive

regulatory framework for shipping

• It includes safety, environmental concerns,

legal matters, technical co-operation,

maritime security and the efficiency of

shipping. 59

Legal Instruments

Source of approximately 60 legal instruments like

a) International Convention for The safety of Life at Sea(SOLAS).

b) International Regulations for Preventing Collisions at b) International Regulations for Preventing Collisions at Sea (COLREG)

c) Port State Control (PSC) authority, allowing domestic maritime authorities such as coast guards to inspect foreign-flag ships calling at ports of the many port states

60

Current Issues

• International Convention on Standards of Training, Certification and Watch keeping for Seafarers (STCW)

• International Ship and Port Facility Security (ISPS) Code

• International Code of Signals

• Intercessional Meeting of IMO’s Working Group on Greenhouse Gas Emissions from Ships

61

THE SHIPPING TRADE PRACTICES BILL, 2008

Objectives

• Bring transparency in trade practices adopted by maritime

transport logistics service providers

• Arranging transportation of containerized cargo

• Registration of such service providers and their obligations; • Registration of such service providers and their obligations;

• mode and manner of fixing tariff by the service providers;

• EXIM (Export Import) and for matters connected therewith

or incidental thereto

62

Application of Act

• Extends to the whole of India except the State of

Jammu and Kashmir

• Service providers in relation to carriage or

transportation by ‘Sea’transportation by ‘Sea’

• Service providers for warehousing

• Providing services relating to stuffing and destuffing

of containers

63

Registration

• No person shall carry on or commence the business

of maritime transportation logistics service unless

he is registered under this Act.

• The application shall accompany

• Prescribed fee• Prescribed fee

• Bank guarantee of not less than 10 lakh

rupees

• Insurance from an underwriter for third party

liability cover.

64

• A registration shall be valid for a period of 5 Yrs

• Application for registration considered only if place of

business is registered in India

• The registration certificate shall be non transferable.

• Service provider to publish the tariff for the services

• The registration is subject to production of the bank

guarantee and the insurance cover every year

65

References

• UNCTAD Review of Maritime Transport, 2009

• Lloyd's MIU Study at the IMSF conference in New

Orleans in May 2009

• http://ipa.nic.in/ - Indian Ports Association• http://ipa.nic.in/ - Indian Ports Association

• http://www.iilschennai.com/ - Indian Institute of

Logistics, chennai

66

Thank You…!!

67