MT1002 Maritime Logistics & Transport

Maritime Logistics
MT1002-Introduction to Maritime Industry (AY2015-16)

Mr. Chiu Sai Hoi, Benson
Objectives of Lecture
Understanding of
Concept of maritime logistics
Introduction of maritime transport
MT1002-Introduction to Maritime Industry_Maritime Logistics
Concept of Maritime Logistics
Maritime logistics is often referred to maritime transport

system that is deeply involved in the entire logistics flows
Main values
Operational efficiency, e.g. reducing lead time, business costs, and

Service effectiveness, e.g. flexibility, responsiveness and reliability
Maximizing the maritime logistics values and successful

integration of the values into global logistics become a
critical strategic objective of the maritime industry
Maritime transport is strategically a crucial part of the

logistics integration system
The whole transport system provides not only transport-related

services but also other related and wider logistical services in a
more efficient and effective manner
Advantages
Reduce additional costs

Reduce unnecessary delay or accident
Integrated demand for maritime transport brings on a

Maritime Logistics concept
Refer to the process of planning, implementing and managing the

movement of goods and information involved in ocean carriage
Differences between maritime logistics and maritime

transport
Maritime Logistics
Concept
Process of planning, implementing and

managing the movement of cargoes and
information involved in ocean carriage
Individual functions relating to sea
transportation, and
Focusing Point
Effective logistics flow as a systematic
entity
Sea transportation activities:
Contracting, shipping, sea voyage,
moving cargo, loading/ unloading, and
Function
Additional logistics services:

Storage, warehousing, offering
distribution center, assembly, packaging,
repacking, inland connection, etc.
Maritime Transport
Process of carrying and handling
cargoes across the ocean
Individual functions with own aims

and competitiveness relating to sea
transportation
Sea transportation activities:

Contracting, shipping, sea voyage,
moving cargo, loading/ unloading
3 Key Players in Maritime Logistics

1.
2.
3.
Shipping
Port operations
Freight forwarding
Source: Maritime Logistics by Dong Wook Song & Photis M Panayides

Role of Shipping in Maritime Logistics
Transport mode
Moving cargoes between ports, i.e. from shippers to consignees
Role of Shipping in Maritime Logistics
Supporting logistics activities
Prepare documentation relating

sea trade, e.g. Bill of Lading (B/L)
Provide container tracking and
information
Logistics services, e.g. logistics arm
B/L
Role of Port Operations in Maritime Logistics
Distribution center
Depot
Transit cargoes from shore to land or vice versa

By different intermodal systems, e.g. rail, road, inland waterway, etc.
Store cargoes which will be transferred within a certain period of time
Warehouse
Port may equip with Container Freight Station (CFS) for shippers and
consignees to consolidate cargoes
Provide value-added services, e.g. repacking, labeling, etc.
Role of Freight Forwarding in Maritime Logistics
Agent on behalf of shipper
Book vessel
Prepare requisite documents for ocean carriage and trade
Inventory management
Provide warehousing services to shippers and consignees to

consolidate cargoes, packaging, labeling, etc.
10
Introduction of Maritime Transport
Different Transportation Modes
Air
Land
Rail
Road
Water (Maritime)
Inland waterway
Short sea
Ocean-going/ deep sea
11
Air Transportation Mode
Cargoes are mostly carried by Unit Load Device (ULD)

Main characteristics of cargoes
High value
Perishable
ULD
12
Land Transportation Mode
Cargoes are normally carried by containers on rail or road

Highly integrated with water transport, i.e. intermodalism
Advantages of intermodal system
Reduce re-handling of cargoes

Lower operating cost
13
Water (Maritime) Transportation Mode
Transportation of cargoes by vessel

Advantages
High capacity
Cost effective
Energy efficient
Reduce congestion on road
14
Water (Maritime) Transportation Mode
More than 80% of international trade of goods are carried by sea,

i.e. seaborne trade
2 major types of seaborne trades
Liner shipping
Tramp shipping
Seaborne Trade
Liner Shipping
Tramp Shipping
15
Derived Demand
A factor which is not in demand for its own sake but derived from
the demand for the goods
Transport Demand
= 200,000
Singapore
Demand = 200,000
Transport
Demand = 0
Mfg Base in China
Congo
Demand = 0
16
World economic activity is one of the major factors to

induce derived demand
Benefited by globalization
International integration arising from increasing human activity

Interchange of products, ideas, culture, etc.
Advances in transportation and telecommunications infrastructure
drive globalization
17
Gross Domestic Product (GDP) is a direct indicator for

world economic activity
A measure of the total flows of goods and services produced by the

economy calculated by market value on an annual basis
Source: Wikipedia
18
Strong correlation between World GDP growth and

World seaborne trade
Also, industrial production index is highly correlated to
World GDP growth and World seaborne trade
Seaborne Trade
GDP
Source: UNCTADs Review of Maritime Transport 2014

19
Major International Seaborne Trades
Asia Europe
Asia North America
Europe North America
Intra Asia
Latin America
Middle East
Australia
Source: Drewry Maritime Research, 2011 Data
20
Asia Europe (AE Trade)
Source: https://www.apl.com/routes/
21
Asia North America (Transpacific Trade)
22
Europe North America (Transatlantic Trade)
23
Major Maritime Locations
Strait of Malacca
Important for container vessels, dry bulk carriers and tankers

~800km in length, ~50-320km in width, min. channel depth ~23m
24
Strait of Hormuz
Important for oil tankers: ~20% of oil export, ~35% of oil tankers
Linkage between the oil fields of the Persian Gulf and Gulf of Oman
~6km wide in navigation channel
25
Panama Canal
Reduce voyage distance of Transpacific Trade

~86km and limited by lock chambers
Allow passage of smaller container vessels, dry bulk carriers and
tankers
Lock Chamber
26
Suez Canal
Reduce voyage distance of AE Trade

~163km in length, ~135m wide without lock chamber
Allow passage for all container vessels and almost all dry bulk carriers
and tankers
27
Nicaragua Canal
Reduce voyage distance of Transpacific Trade

~240km in length, ~3.5 times the length of Panama Canal
Construction is planned to begin in December 2014 and might take up
to 11 years to construct
28
Great Lakes St. Lawrence Seaway
~3,700km in length with lock chambers

Linking Atlantic Ocean to the Great Lakes, as far as Lake Superior
Mostly for the transportation of bulk cargoes to Canada and US
29
Some important rivers
Mississippi River
Yangtze River
Pearl River
Nile River
Amazon River
Danube River
Yangtze
Pearl
Mississippi
Danube
30
Some important short seas
Baltic Sea
Black Sea
Mediterranean Sea
North Sea
31
Q&A
~~Thank You~~
Email: bensonchiu@ntu.edu.sg
Office Address: Block N1-01b, Room 44
Office Phone: 6790 5273
32
Back
Shipper & Consignee
Consignee A person or company to whom commodities

are shipped
Shipper A person or company who is usually the
supplier or owner of commodities shipped. Also called
Consignor
33
Back
Logistics Arm
Shipping Companies with Logistics Arm
34
Back
Logistics Arm
Financial Performance of APL Logistics, NOL (FY2014)
Source: NOLs 2014 Performance Review

35
Back
Intermodalism
Intermodalism in general is defined as the transportation

of a person or a freight from its origin to destination by a
sequence of at least 2 transportation modes in the same
loading unit
Containerization is a catalyst of intermodal system
VS
36
Back
GDP
GDP (nominal)
GDP (Purchasing Power Parity, PPP)
Calculated at market exchange rates

Adjust for differences in the cost of
living in different countries
GDP (PPP) per capita
Per population of the nation
Top 20 Countries by GDP (nominal) in 2014;

Source: Wikipedia (Data from International Monetary Fund)
37
Back
GDP (nominal) Per Capita
Top 30 Countries by GDP (nominal) Per Capita in 2014;

38
Back
GDP (PPP) Per Capita
Top 30 Countries by GDP (PPP) Per Capita in 2014;

39
Back
Big Mac Index
A guide to measure whether currencies are

at their correct level
Invented by The Economist in 1986

Based on PPP between 2 currencies
Ave. price at US ~4.37USD; Singapore ~3.64USD

(4.5SGD)
Big Mac Index says SGD was undervalued by ~17%
RMB and HKD undervalued by ~41% & ~50%
Norwegian Krone overvalued by ~80%
Norway
China
Hong Kong
Singapore
Source: The Economist

40
Back
Big Mac Index
Number of Big Macs that can

be bought after working for
one hour on minimum wage
In HK, the ave. price is ~19HKD

with a min. wage of 30HKD, so a
worker who works for one hour
can buy ~1.54 Big Macs
Source: OECD and The Economist

41
Back
World GDP Growth
World economy growth in

GDP slowed down in
2012/13 vs 2011
Estimated a slight
improvement in 2014 with
~2.7% growth vs 2013
Higher GDP growth in
developing economies vs
developed economies
Source: UNCTADs Review of Maritime Transport 2014
42

MT1002 Maritime Logistics & Transport

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Maritime Logistics

MT1002-Introduction to Maritime Industry (AY2015-16)

MT1002-Introduction to Maritime Industry_Maritime Logistics

Concept of Maritime Logistics

Maritime logistics is often referred to maritime transport

Operational efficiency, e.g. reducing lead time, business costs, and

Maximizing the maritime logistics values and successful

MT1002-Introduction to Maritime Industry_Maritime Logistics

Concept of Maritime Logistics

Maritime transport is strategically a crucial part of the

The whole transport system provides not only transport-related

Reduce additional costs

Integrated demand for maritime transport brings on a

Refer to the process of planning, implementing and managing the

MT1002-Introduction to Maritime Industry_Maritime Logistics

Concept of Maritime Logistics

Differences between maritime logistics and maritime

Process of planning, implementing and

Additional logistics services:

MT1002-Introduction to Maritime Industry_Maritime Logistics

Individual functions with own aims

Sea transportation activities:

Concept of Maritime Logistics

3 Key Players in Maritime Logistics

Source: Maritime Logistics by Dong Wook Song & Photis M Panayides

Concept of Maritime Logistics

Role of Shipping in Maritime Logistics

Moving cargoes between ports, i.e. from shippers to consignees

MT1002-Introduction to Maritime Industry_Maritime Logistics

Concept of Maritime Logistics

Role of Shipping in Maritime Logistics

Supporting logistics activities

Prepare documentation relating

Concept of Maritime Logistics

Role of Port Operations in Maritime Logistics

Transit cargoes from shore to land or vice versa

MT1002-Introduction to Maritime Industry_Maritime Logistics

Concept of Maritime Logistics

Role of Freight Forwarding in Maritime Logistics

Agent on behalf of shipper

Provide warehousing services to shippers and consignees to

MT1002-Introduction to Maritime Industry_Maritime Logistics

Introduction of Maritime Transport

Different Transportation Modes

MT1002-Introduction to Maritime Industry_Maritime Logistics

Introduction of Maritime Transport

Air Transportation Mode

Cargoes are mostly carried by Unit Load Device (ULD)

MT1002-Introduction to Maritime Industry_Maritime Logistics

Introduction of Maritime Transport

Land Transportation Mode

Cargoes are normally carried by containers on rail or road

Reduce re-handling of cargoes

MT1002-Introduction to Maritime Industry_Maritime Logistics

Introduction of Maritime Transport

Water (Maritime) Transportation Mode

Transportation of cargoes by vessel

MT1002-Introduction to Maritime Industry_Maritime Logistics

Introduction of Maritime Transport

Water (Maritime) Transportation Mode

More than 80% of international trade of goods are carried by sea,

MT1002-Introduction to Maritime Industry_Maritime Logistics