Ship

Peter Wong

Objectives
Types of ship available Historic reasons for changes How these changes affect our operations Ship container port relationship

Ship Hull Design

Ship type container ship

Ship type bulk carrier

Ship type bulk carrier

Ship type general cargo

Ship type general cargo

Ship type hatch cover crane

Ship type car carrier

Car Carrier

Ship type - RoRo

Ship for energy trade

Ship type crude oil carrier

Ship type LNG carrier

Special ship type

Ship type - dreger

Ship type - passenger

Ship type - tug

Ship profile

Container ship
Containerisation 1955

Conbulk conversion Mainly for cabotage trade Purpose built vessel started from 1960s Deployed for ocean going, deep sea Termed as fully cellular ship DWT replaced by TEU

Capacity - TEU
400 1,000 first generation 1,001 2,000 second generation 2,001 3,000 third generation 3,001 4,000 forth generation

(POST PANAMAX)

Etc 4,0001 - . . . . . Mega carrier

SPEED
Fast (18-25 knots) Slow (12-18 knots) Service speed Optimum speed trade speed Design speed naval architect Operating speed daily speed

Changes of vessel design

Steam ship

Gas turbine High speed, high bunker cost Additional fuel cost - diesel Slower speed, cut off during rough weather Same bunker type

Motor vessel

Current configuration

Speed = cost
Speed 16 15 14 13 12 Main engine fuel consumption tons/day 44
Daily fuel charge: (7.3 barrels x $90 x 44)

36 30 24 19

Speed and Size

Capacity Teu
1988 1994 1995 1996 1997 2003 2006 APL C10 NYK APL C11 P & OCL Maersk Maersk Maersk 4340 4743 4832 6674 8680 9,310 14,500

Speed
24 24 24.5 25 25 26 27

Propulsion - bhp
Sulzer 1970 1980 1990 1995 RND90 34,800 RLB90 - 48,000 RTA84C 65,400 RTA96C 89,640 MAN - B&W K90GF 40,900 K90GFCA 47,300 K90MC-C 70,320 K98MC-C 93,120

Ship Size
Panama Canal

Refrigeration
New extra electrical power for refrigerated containers Extra set of electrical generator Duplicated generators

Safety Stable electricity supply Reduce carrying capacity of the ship

Facilitator for containerisation

UNCTAD liner code

40/40/20 Developing countries national fleet World bank develop the terminals
http://www.worldbank.org

EU ship owners hold a negative view about containerisation initially

UNCTAD not getting along with shipowner associations

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Stakeholders of Sea Transport

Objectives

Who controls the shipping services How can they control this industry

Why we need to know them ?

Global issue Although they look quite remote from us, their decisions affect everyone Any changes in future shipping industry, come from these organisations

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BIMCO
The Baltic and International Maritime Council established in Denmark in 1905 worlds largest international shipping association with approximately 2,550 members in 123 countries. The owner-members of BIMCO control a fleet of about 525 million DWT thereby representing 65% of the worlds merchant fleet. www.bimco.org

BIMCO services
Laytime and Timecharter issues Interpretation on contractual issues, opinion on shipping clauses and charter parties Intervention Services, i.e. BIMCOs bad debt collection and company background information service Ice Reports

IMO

International Maritime Organization www.imo.org

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IMO - mission
to provide machinery for cooperation among Governments in the field of governmental regulation and practices relating to technical matters of all kinds affecting shipping engaged in international trade; to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships". The Organization is also empowered to deal with administrative and legal matters related to these purposes.

IMO
Focus on International Convention for the Safety of Life at Sea (SOLAS), since 1960. matters such as the facilitation of international maritime traffic, load lines and the carriage of dangerous goods, while the system of measuring the tonnage of ships was revised. a new problem began to emerge - pollution. The growth in the amount of oil being transported by sea and in the size of oil tankers was of particular concern.

UNCTAD

United Nations Conference on Trade and Development www.unctad.org

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UNCTAD
Established in 1964, aims at the development-friendly integration of developing countries into the world economy.

UNCTAD mission
focal point within the United Nations for the integrated treatment of trade and development and the interrelated issues in the areas of finance, technology, investment and sustainable development. forum for intergovernmental discussions and deliberations, supported by discussions with experts and exchanges of experience, aimed at consensus-building.

UNCTAD mission (contd)

undertakes research, policy analysis and data collection in order to provide substantive inputs for the discussions of experts and government representatives. in co-operation with other organizations and donor countries, provides technical assistance tailored to the needs of the developing countries, with special attention being paid to the needs of the least developed countries, and countries with economy in transition.

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UNCTAD
Liner code in the 70s 40-40-20 cargo reservation Strong opposition from shipowners

40-40-20
40 % carried by export country 40% carried by import country 20% shared by others

World Bank

www.worldbank.org

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World Banks mission

to fight poverty and improve the living standards of people in the developing world. provides loans, policy advice, technical assistance and knowledge sharing services to low and middle income countries to reduce poverty. promotes growth to create jobs and to empower poor people to take advantage of these opportunities

World bank
Help to construct new container terminals in developing countries Promote containerisation Over invested in many countries

Classification society

http://www.iacs.org.uk/member s.htm

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Classification society
AMERICAN BUREAU OF SHIPPING BUREAU VERITAS - France DET NORSKE VERITAS Norway LLOYD'S REGISTER NIPPON KAIJI KYOKAI

http://www.eagle.org http://www.veristar.com http://www.dnv.com

http://www.lr.org http://www.classnk.or.jp

P & I Club

http://www.ukpandi.com

P & I Club
P&I is insurance in respect of third party liabilities and expenses arising from owning ships or operating ships as principals. It is not hull insurance, war risk insurance, loss of profit/freight insurance, detention insurance, strike insurance or uninsured legal expenses cover

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P & I Club Cover -1

1. Personal injury to or illness or loss of life of crew members 2. Personal injury to or loss of life of stevedores 3. Personal injury to or illness or loss of life of passengers and others 4. Loss of personal effects 5. Diversion expenses 6. Life salvage

P & I Club Cover -2

7. Collision liabilities i. One-fourth collision liability ii. Other risks excluded from the Running Down Clause iii. Excess collision liability 8. Loss or damage to property other than cargo 9. Pollution 10. Towage contract liabilities 11. Liabilities under contracts and indemnities 12. Wreck liabilities

P & I Club Cover -3

13. Cargo liabilities 14. Cargo's proportion of general average or salvage 15. Certain expenses of salvors 16. Fines 17. Legal costs 18. "Omnibus" cover

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P & I Club Cover - 4

19. Overall conditions of cover 20. Exclusion of war risks 21. Selection by shipowners of particular heads of cover and of deductibles 22. Cover for charterers 23. Additional Covers

Stakeholder
Shipowner

Very personal Very personal

Bankers

Shipping service type

Cabotage

Coastal routes Confined to national

Inland waterway

Extensive use in Europe, China . . Etc

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Shipping service

Tramp and Liner

Liner and Tramp

Tramping
Number of shippers Quantity Density Unit Value Regularity Contract Vessels Frequency Goods Services Freight elasticity Markets Tons (est.) Value (est.)

Liner Shipping

Transportation demand Few Many Big Small High (weight) Low (volume) Low High Low High Transportation supply Vessel (C/P) Goods (Bill of Lading) Liquid and bulk vessels General Cargo Low High Implications Liquid and main bulk Minor bulk and general cargo commodities Supply/demand regulation Prior to demand Low Low Poor/Rich countries Rich/Rich countries Share in maritime transport (2000) 70% 30% 20% 80%

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Ship type selection

Lateral cargo mobility Finance of the ship

Out of own pocket Second hand New building Incomplete contract

Literal Cargo Mobility

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Shipping Document

Documents required for the carriage of goods

Shipping Document

For your information only

BL - 1
A bill of lading is a document which is issued by the transportation carrier to the shipper acknowledging that they have received the shipment of goods and that they have been placed on board a particular vessel which is bound for a particular destination and states the terms in which these goods received are to be carried.

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BL - 2
Separate bills of lading are issued for the inland or domestic portion of the transportation and the ocean or air transportation, or a through bill of lading can be obtained covering all modes of transporting goods to their destination.

BL - 3
Bills of lading, whether inland or ocean, can be issued in either non-negotiable (straight) form or in negotiable form. If the bill of lading is specified as being nonnegotiable, the transportation carrier must deliver it only to the consignee named in the bill of lading, thus the bill of lading acts both as a receipt of goods and as an agreement to transport these goods to a specific destination and consignee in return for payment of the transportation charges.

BL - 4
If the bill of lading is specifically labeled as being negotiable, ownership to the goods and the right to re-route the shipment are with the person who has ownership of the bill of lading properly issued or negotiated to it. Such bills of lading are issued to shipper's order, rather than to a specific, named consignee. Where collection and payment is through banking channels, such as under a letter of credit or documentary collection, negotiable bills of lading are required (except for air shipments). The exporter must endorse the bill of lading and deliver it to the bank in order to receive payment.

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BL - 5
There are four types of bills of lading: inland, ocean, through, and air waybill. Inland Bill of Lading - this is a a contract between a shipper and transportation company used when transporting goods overland to an exporter's international carrier.

BL - 6
Ocean Bill of Lading - this is a contract between a exporter and an international carrier for transport of merchandise to a specified foreign market overseas.

BL - 7
Through Bill of Lading - A document that establishes the terms between a shipper and a transportation company covering both the domestic and international transport of export goods between specified points for a specified charge. For example, an air shipment can be covered with a through bill of lading; however, ocean shipments require both an inland bill of lading (for domestic transport) and an ocean bill of lading (for international transport).

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BL - 8
Air Waybill - An airway bill is a bill of lading which covers both domestic and international flights transporting goods to a specified destination. It establishes the terms between a shipper and an air transportation company for the transport of goods. Included in the document are the conditions, limitations of liability, shipping instructions, description of commodity, and applicable transportation charges.

BL - 9
In addition, the air waybill is a non-negotiable document which serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed and obligates itself to carry the consignment to the airport of destination according to specified conditions.

Accompanying documents

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Other documents
Manifest Customs invoices Certificate of origin

Shipping service

Market structure
Liner Oligopoly market heterogeneous commodity Price stable

Kick demand curve

Tramp Perfect competition market Homogeneous commodity Price driven by market

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Liner pricing method

Fixed price Marginal pricing Commodity pricing

Tramp pricing method

Flexible pricing Pure demand and supply of capacity Depend on type of ship and cargo

Liner Shipping

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Liner Shipping
Fixed sailing schedule Known freight rate Fixed itinerary

Port
A place for loading & discharging cargo Interface between sea and land transport Must be efficiency reduce port time

Ship and Port

Operating cost per unit is lower in larger ship Economies of scale Larger ship

longer port time Reduce annual productivity Reduce revenue Congestion at port Penalty for larger ship . . . . unless

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Evolution
Port congestion Linkage between ship size and cargo Advancement of ship building

Advanced cargo handling

Bulk cargo

Palletisation Better connections with inland facilities Confined to hinterland

Unitisation

Advantages of palletisation
Direct sailing in tramp mode of operation Charge on weight or volume Accommodate various size

Hold utilisation

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Container revolution

Revolution
Why we need Containerisation ?

Congestion at ports Diseconomies of scale Deteriorate service level damage, pilferage Containerisation is one type of improvement methods used in the 40s & 50s Pallestisation vs containerisation

How to start containerisation

Boxes Ships Shipping systems Ports

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Evolution and Revolution in Liner shipping

Service pattern Ship to ship Ship to rail Ship to shore

Time 60 80 90 2020

Container revolution
Shorten port time, moved from port-to-port to door-to-door delivery Intermodal landbridge, expanded hinterland Transhipment Hub and spoke Global scenario

Trade Route
End to end Pendulum RTW

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Trade Route End to end

B A

Trade Route Pendulum

C A

Trade route Round The World

Capital intensive Improve empty boxes imbalance Will it take longer transit time ? Shippers preferred?

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A new revolution M Stopford

Growth of sea transport

Trade matrix broaden Trade in manufacturing sector blooming

E-commerce, cheap communications, government policy . . .

Problems
Cluster trades

Speed and reliability Use the FedEx example Small and urgent cargoes unattended

All companies use big ship

Conclusion
Low cost computer technology Growth containership clearing house (can charter any ship anytime) Environmental issue

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Terminal operations

Space utilization
How much terminals space is occupied by containers Normal calculation = stack x height Dwell time duration the container in the terminal area

Dwell time
Import or export containers Container free time in terminals Loaded or empty container why? Transient container Port related traffic

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Capacity measurement
Capacity

Higher ties more steps for movements Different zones for container interchange Higher ties expensive investment

Throughput
Crane movement Gang time Berth time Terminal process all concerned parties [ship, LCL, crew ]

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Networks
Containership networks

ORIDES Feeder and linehaul Transhipment network

Transhipment

Location selection
Regulatory controls Financial pollution related costs Future trends

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Port

Port overview

Wet bulk terminal Johor port

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Port bulk terminal

Combine terminal

Relocation of port

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Port configuration
Linehaul Feeder Hub and spoke configuration

Selection of port
Location, location Efficiency port productivity Port charges Hinterland available Government policies Geographic considerations

Tidal time

Port productivity

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Productivity
Outputs vs inputs

Capital Time Personnel Quantify an intangible quality Results are arguable Need fine definition and standardisation

Difficult to measure

Measurements in port
Need for improvement Prepare for future competition Position in the market Need for marketing and promotion of port

JWD - productivity
Short term

Stevedoring Gate Intermodal Yard productivities Overall throughput Terminal throughput density Berth throughput density Container storage dwell time

Long term

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Cycle

Zero resource availabilty

Fraction of work time

See page 21

Gang time
Cannot assign more gang to increase the productivity

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Port services
More active in marketing the port services Port charges

Depend on port pricing policies

Cost recovery Usage charges Other benefits generated from port services

Overlapping service areas

Depend on government policies

Future trend - 1

Future trend - 2

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Future trend -3
Liner concentration

Liner concentration

refer to UN ECLAC paper

Concentration
Liner companies, especially large one, cluster their services around a particular location

Governments promotion of port efficiency Alliance formation Optimal vessels deployed in the trade

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Impacts of Concentration - 1
Lower unit cost leads to lower freight rate Disproportion return on investment due to keen competition, company need to pass the profit to customer Overcapacity on certain trade lanes but not the global situation

Impacts of Concentration - 2
Freight rate fluctuation

High fixed costs induce high marginal pricing. To capture market share, in short run, company will only set to cover only marginal costs Unstable formation, why ? Due to cascade effect of newly deploy large vessels Port will gain with trans-shipment services

Alliances

Expansion of the trade lane from EW to NS

Trans-shipment volume increase

Impacts of Concentration - 3
Create trans-shipment centre

Even the port can provide good service at low price, it depends on its location Focus on a particular segment in the market Depend on the attitude of individual government

Segmentation of smaller liner company

Change of government policy

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Outlook
Concentration benefit everyone in the industry Extend to wide coverage spreading Beware of the vertical integration as it may turn into cartel operation How about the smaller players (liner + port) ?

Small players
Liner

Cooperate or focus on a particular segment of market Accept the reality and cooperate with regional ports Promote trade, encourage more users to use the port

Port

Small players (contd)

Regulatory bodies

Accept the trends in globalisation and privatisation and open up the market for competition

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ULD

Type of ULD
Container Air container Pallets Swapbodies

ISO sea container

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What type of ULD

The modes of transport Select the right type of container based on the commodity, loading and unloading facilities inspect container for contamination Preplan container storage, why?

Which type of ULD

Block and brace the product properly within the container

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Which type of ULD

extra attention to freight types

liquid in drums loads with high centre of gravity off centre loads high density loads

Hazardous Cargoes
Why it is a big concerns ? Strict regulations How the shippers going to beat this systems ?

ISO container
International Standards Organisation deals with standardization in all international fields except electrical and electronic engineering form many technical committees

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Container - 1
One type of the Unit Load Device (ULD) interchangeable handled by standard handling equipment promote freight movement

Container - 2
can easily calculate the capacity and weight General 8x8x20 TEU FEU getting very popular since 60s branched out into container construction, container owning and container leasing industries

Container operation - 1

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Container operation -2

Container seal

Container seal

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Container Size
Owner would like to use non ISO standards, why ?

Container 20 side door domestic

10 container rail operation

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Container Size
Size come from 20, 40, 45, 48 and 53 also come with high cube box 96"

48 and 53

Container Types
ventilated container condensation bulk cargo containers

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Container Types
dry cargo containers

Dry Cargo Container

Open Top Container

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Reefer Container

Bulk container

Bulk container - discharging

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Bulk container

Container Types
intermediate bulk container (IBC)

just a large plastic bag pallet sized and 3'-6 high flexible and rigid two types can be single use or reusable what are the commodities that it will carry ?

Pallets
General measure 40 inches x 48 inches pallet base may be two or four way entry type easily and inexpensively constructed reusable and light-weight

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Plastic Pallet

Pallet pull & push

Paper pallet

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Swapbodies
Popular in Europe Come in various shapes and sizes Two types

tile unit - like a road haulage vehicle without wheels container type - for bottom lift only and cannot stack more than three tiers

Common size is 7.15M Suitable for road-rail transport Popular in Germany, French and UK in future

Swap bodies

Swap bodies

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Container Manufacturing
Why Far East domain this industry ? Low construction costs Near the freight market, why? Easy to build

Building and selling container

For warehouse, mobile office . . . . . For one way traffic Trade-in old container Mainly depend on the local market, why?

Container certification -1
For customer TIR convention

goods cannot be removed from the container without breaking the seals custom seals can be easily added and removed no space for hidden goods all spaces is accessible for inspection

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Container certification - 2
Protection of foodstuffs Under the ATP (Agreement on the International Carriage of Perishable Foodstuffs) Must have a temperature controlled device Safety in handling CSC (The International Convention for Safe Containers) requires all containers as defined and included in the agreement to be tested, approved and periodically examined for the life of the container

Container certification - 3
Must carry a plate certifying that the container meets all requirements Construction and testing Adoption of ISO requirements Pass through the inspection from classification society

Container code
Why we need the code ?
http://www.bic-code.org/html-gb/bic_code.html

Prefix + serial number + check digit Country code + ISO Code

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International container bureau

Bureau International des Containers et du Transport Intermodal (B.I.C.) with 1200 members, is the only nongovernmental organization linking all groups interested in containerization and intermodal transport: carriers, manufacturers, operators, lessors, shippers, forwarders, etc

Functions of BIC
To contribute to the expansion of containerization and intermodal transport, To facilitate professional discussions on all subjects connected with containers and intermodal transport, To obtain and keep updated specialised documentation for the benefit of its members.

For the trainer

Key words

Who control shipping ? What types of shipping available? How shipping interlink with port ? How to select a port ? What unit that we use in shipping ?

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