Chapter 4: Maritime & Container Shipping Flashcards
What are emerging markets of the future, which have an impact on the shipping industry?
Emerging trading markets of the future:
- The shipping industry, in terms of volumes of containers shipped, is now dominated by intra-Asian trade, which accounts for around one in three containers shipped.
- For several years the importance of China–Europe and China–United States volumes have been declining. Instead, you see “non-main-lanes” like China-Africa
- One of the main reasons for this is the development of virtual manufacturing networks, which have spread right across the whole of Asia.
Which main types of ocean carriers and ships do you know - besides specialized vessels?
Please characterize each type briefly!
-
Liner Carriers / Ships with subtypes
- Conventional liners
- Container liners
- Other liner Services
They have in common that the service is offered on a fixed schedule, with fixed transport conditions and tariffs -
Charter Vessels / Tramping with subtypes
- Tramp Traffic (Chartered)
- Contracted grips
These types of ships have in common that the service is only offered for a specific demand and often for a specific customer. The conditions and tariffs are often-fixed over a longer period of time for a specific booked capacity on board.
What is the percentage relation between tramping and liner shipping regarding the tons vs. the value of all transported goods?
- Tramping transports are responsible for approx. 70% of the tonnage and (only) 20% of the value of all worldwide shipped goods
- Liner shipping transports are responsible for approx. (only) 30% of the tonnage and 80% of the value of all worldwide shipped goods
Please name the full version of the following abbreviations of vessel types!
OBO - ships
PCTC - ships
LPG/LNG - ships / carriers
- OBO = Ore, Bulk , Oil
- PCTC = Puree Car and Truck Carrier
- LPG / LNG = Liquefied Petroleum Gas / Liquefied Natural Gas
Characterize the following types of maritime routes:
Port-to-Port, Pendulum, and Round-the-World!
-
Port-to-Port:
Regular service between at least two ports (back and forth; often with empty runs); limited connectivity often for oil or minerals between zones of extraction and industrial regions - Pendulum:
Containerized cargo; involves a regular route between a sequence of ports, often serviced by geographical proximity; cases: Western Europe and Eastern Seaboard of USA or between Pacific Asia and North America
- Round-the-World:
Servicing a sequence of ports (in both directions) with the aim to do a round trip around the world; a limited amount of ports per continent are served; Container Shipping with the involvement of transshipment hubs
Please name the three strategic maritime passages we discussed during the lecture!
Which one is the most important from the perspective of international trade? Why?
The three important strategic maritime passages we discussed were:
- the Panama canal
- the Suez canal
- the Strait of Malacca - the most important strategic passage between the Pacific and Indian Ocean. It is so important because more than 50,000 ships/year have to pass this constraint between Europe and Pacific Asia.
About 30% of world’s trade and 80% of Japan’s trade alone.
What are the largest sea harbors in Germany?
For what stands the abbreviation “ARA Harbors”?
- The largest seaports in Germany are located in Hamburg and Bremerhaven
- The ARA Harbors are Amsterdam, Rotterdam and Antwerp
What are the main cargo types handled in Hamburg and in Rotterdam?
- Hamburg is a large container port
- Rotterdam as the largest seaport in Europe is specialized in the import of raw oil and oil products.
How would you characterize the structure of the global container shipping industry?
The container shipping industry is characterized by three key attributes:
- it has a high level of fixed costs
- there is little difference in the types of service offered
- it is highly concentrated, with a few shipping lines accounting for the majority of market share.
The sector is now characterized by a complex ecosystem of interrelated parties and processes. This involves the shipping lines, the ports, and the terminal operators
Please characterize in brief the functions of the three following areas of a container port:
Marshalling Yard, Container Yard, and Container Freight Station?
- Container Freight Station: is often operated by logistics service providers, the job of LSP are value-added services in the inbound and outbound flow of containers to and from the container port. This includes e.g. the stacking or stripping of containers form LCL to FCL and vice versa.
- Container Yard: is a space for temporary container storage for inbound and outbound flowing containers
- Marshaling Yard: is the area in a container port where the containers are prepared for loading (outbound marshaling) or unloading (inbound marshaling). In modern ports, this area is highly automated with automated cranes and conveyor units.
For which procedures stand the following abbreviations:
FCL/FCL, LCL/LCL, FCL/LCL, LCL/FCL?
- Full Container Load – FCL/FCL: Shipper supplies a full container to a carrier. The container was loaded by the shipper.
- Less than Container Load – LCL/LCL: Shipper supplies groupage goods to the carrier. Stuffing of container is done by special LSP at the CFS (Container Freight Station) for additional LCL-Service Charges
- FCL/LCL: Shipper supplies full container to the carrier. At the port of destination, the container is stripped by an LSP at the CFS and transported to the consignee
- LCL/FCL: Like FCL/LCL only vice-versa
Which types of specialized containers do you know?
- Open tops are used for easy load of cargo such as logs, machinery and odd sized goods
- Flat racks can be used for boats, vehicles, machinery or industrial equipment
- Open sides may be used for vegetables such as onions and potatoes
- Tank containers transport many types of liquids such as chemicals, wine, and vegetable oil
Please explain the following statement:
The shipping industry is highly vulnerable to cyclicality!
One of the reasons for the cyclicality in the shipping industry is the relationship between supply and demand:
- In normal conditions, supply – fleet capacity – cannot be switched on overnight. For new-build ships, there are long lead times of between two and four years and these long lead times mean that orders placed in boom periods can be delivered after the peak has passed.
- In other words, for long periods of the economic cycle, there is often under-supply, due to shipping lines’ inability to predict demand accurately, followed by over-supply when a large amount of extra capacity is finally introduced.
- This means that shipping lines’ revenues are often hit by the ‘double whammy’ of falling rates (due to over-capacity) and falling volumes (due to weak economic demand).
What are the advantages and disadvantages of the containerization of goods?
Advantages are:
- Unique handling and standardization of the loading unit - better exchangeability
- Containers are available for different kinds of goods (manufactured goods, liquids, refrigerated goods etc.)
- High Economies of scales (stackability and efficient turnover at the ports)
- Velocity in transshipment operations and warehousing
- Contents are unknown to carriers (reduced spoilage or losses)
Disadvantages are:
- Large consumption of terminal space (increasing problem with increasing ship sizes)
- Tied up capital for handling equipment and containers
- Complexity in stacking and reachability
- Cost driving repositioning often needed
- Potential losses by theft or damages
- Illicit trade of goods, drugs and weapons
What are problems resulting out of the continuous growth of ship sizes in last decades?
- Reduction of available seaports: Ship size limits the number of ports which are deep enough for loading/unloading.
→ Longer roundtrips, high infrastructural investments - EoS of large ships (> 250.000 t of load) are not significant: Compensation of cost reductions because of more intensive handling, longer trips in pre-, long- and post-haul transports
- Increasing stays at the port, with a reduction of operating time (1:1 in general cargo vs. 75% operating time in container shipping)
- A growing risk in the case of a shipwreck
→ increasing insurance costs - Growing problematic to optimize the capacity usage in tramp shipping
