THEMARITIME Economist Connecting Academia and Professionals Winter 2016 | Issue 4
Editorial: Liberation of Economic Thought in Shipping
Profession & Practice Terminals, Logistics and its Palyers: Challenges from a Pivotal Mediterranean Position Alessandro Pananro
INPLAIN Maritime Transport in the Aftermath of COP21 Harilaos N. Psaraftis
FreshMINDS Bananas, Ecuador’s Main Export Product: In Search of an Efficient and Competitive Port Logistics Chain through the Port of Guayaquil Andrea Carolina Moreno T., Ximena María Córdova V. & Rosa Guadalupe González R. A Vehicle Booking System to Improve Landside Coordination in a Chilean Port Terminal Renzo Alberti, Guillermo Krebs, Francisco Mejías
CHALLENGE Shipping Economics Research: There is More to Share Between Academia and Industry Konstantinos G. Gkonis
Memories Memories from the Halifax 1999 Conference Mary R. Brooks IAME Newsletter July 1996
I N T E R N AT I O N A L A S S O C I AT I O N O F M A R I T I M E E C O N O M I S T S Find Us at www.mar-economists.org
INTERNATIONAL ASSOCIATION of MARITIME ECONOMISTS The leading society on Maritime Economics and Business Management
JOIN US TODAY! The International Association of Maritime Economists (IAME) is an international forum for the exchange of research and information among those interested in maritime and maritime-related issues.
For membership www.mar-economists.org/membership
Winter 2016 | Issue 4
Fall 2015 | Issue 3
CONTENTS President’s Message Jan Hoffmann, President of IAME 4 Editorial: Liberation of Economic Thought in Shipping Okan Duru, Editor-in-chief 6 Editorial Board & Owner Declaration InPlain Maritime Transport in the Aftermath of COP21 Harilaos N. Psaraftis 8 Profession & Practice
Terminals, Logistics and its Players: Challenges from a Pivotal Mediterranean Position Alessandro Panaro
FreshMINDS Bananas, Ecuador’s Main Export Product: In Search of an Efficient and Competitive Andrea Carolina Moreno T: Port Logistics Chain through the Port of Ximena Maria Córdova V. Guayaquil Rosa Guadalupe Gonzales R. 22 A Vehicle Booking System to Improve Landside Coordination in a Chilean Port Renzo Alberti Terminal Guillermo Krebs Francisco Mejías 28 Challenge Shipping Economics Research: There is More to Share Between Academia and Industry Konstantinos G. Gkonis
Memories Memories of the Halifax 1999 Conference
Mary R. Brooks
IAME Newsletter July 1996
Book Review HSBA Handbook on Ship Finance 48 Maritime Logistics Value in Knowledge Management 50 IAME 2016 Hamburg: Call for Papers 52 Submission Guidelines 55 Cover Design & Photo: Okan Duru
∑ THEMARITIME Economist
Jan Hoffmann, President president@IAME.info
Memories I am very pleased to see a full year of issues of The Maritime Economist. There is no shortage of high quality submissions and interest in our on-line magazine. It is a milestone in the IAME history. IAME’s history is also the topic of two articles in this issue. Mary Brooks reports on the 1999 conference in Halifax, and we reproduce our 1996 newsletter – which was still a paper version. Among the news was the meeting of the International Maritime Statistics Forum (IMSF) during the IAME meeting – evidencing the more than 20 year collaboration between the two associations. Next year, IAME will celebrate its 25th anniversary. The IAME 2017 organizers have kindly agreed to host our festivities in Kyoto. It is planned to continue with “memories” in next issues of The Maritime Economist as we approach our anniversary conference.
Finally, we would like to express our sincere sorrow and condolences on the loss of the pioneering fellowIAME colleague, Ross Robinson, who passed away in early January. He was at different times of IAME’s history our treasurer, Council member, conference organizer and winner of best paper prize. His invaluable contributions to maritime economics research and IAME will live forever.
Winter 2016 | Issue 4
SUPPORT ME & DONATE ME
A FREE MAGAZINE to create more knowledge
Gold Sponsor Silver Sponsor Bronze Sponsor
ME Mag now welcomes sponsors to support our efforts on developing stronger connection between maritime industry and academia.
GOLD Sponsor Two full page advertisement space per year Home page ad for the period of a full year Acknowledgement at Gold Sponsors List
One full page advertisement space per year Home page ad for the period of a full year
One full page advertisement space per year Home page ad (second tier) for the period of a full year
ADVERTISE WITH ME
For sponsorship inquiries: email@example.com
Liberation of Economic Thought in Shipping Okan Duru, Editor-in-Chief firstname.lastname@example.org
One of the emerging topics of this issue is the incoherent disconnection between academia and the industry. Konstantinos G. Gkonis discusses the problem from both perspectives and emphasizes the puzzle of gathering mindsets (See Challenge Section). It is a critical question on whether there is a liberal environment for ‘thoughts’ and particularly economic thoughts in academia and/or the industry. Scholars are under several constraints which sometimes curtails innovations and freedom of intellectual contribution. Academic publication is always filtered by existing frame of the field through the peer-review process. Innovative reviewers and reviewers under pressure of status quo battle on featuring new ideas. In case of business life, people are always free to raise questions in theory while social embeddedness is an unavoidable driver for many decisions. One of great thinkers of the last century, Karl Polanyi, addressed ‘embeddedness’ and expected that our economic preferences would be more rational with reduced embeddedness in his Great Transformation.
Today, there are more than 30 different schools of economic thought which means that there are 30 different reasoning for prices and many other economic phenomenon. Although there are more options than a century ago, most of our efforts (papers, books and statements) do not emphasize many of them. A few perspectives reserve their legitimacy through our writings and assumptions behind our math. Does that a natural outcome of persistent accuracy on explaining economic phenomenon? Probably not! There are
many ill-defined theories, malfunctioning models or theoretically well-defined but practically idle interpretations in the second half of the last century. There are several lessons learnt, and we are still on the way of finding our great model of human behavior which works properly as in linear optimizations! Rather than searching for an all-purpose single theory, we may benefit from compromising several glasses of economic thought. We may still gain high accuracy while relaxing precision as a constraint. We may even switch between interpretations based on context, stages of economy and the size of our focus (micro-macro). Pluralism in economics education is an emerging and growing topic of the last decade, and several institutions have been established to develop liberalism of economic thinking. Maritime economics is not immune to orthodoxy of few perspectives, and that may be a good opportunity to welcome fresh interpretations from unconventional views. It would also be timely to revisit our heritage of maritime economics and business research. There are remaining questions such as why Basil N. Metaxas accused shipowners of having ‘zero’ memory of the market or why the father of institutional economics, Douglass C. North, drew attention to ocean freight rates of the 19th century. Last but not least, to what extent our existing instruments are able to explain economic phenomenon of the shipping business. On behalf of The Maritime Economist editorial team, I would like to express our Best Wishes for 2016.
Winter 2016 | Issue 4
Connecting Academia and Professionals
EDITORIAL BOARD President of IAME
Editor-in-Chief Associate Editor
Okan Duru Adolf K.Y. Ng
INPLAIN Venus Lun (SE) Adolf K.Y. Ng (SAE) Joan P. Mileski (SAE) Lorena García Alonso (SAE) Profession & Practice Thomas Vitsounis (SE) Pierre Cariou (SAE) Adrian Beharry (SAE) Assunta Di Vaio (SAE) Larissa M. van der Lugt (SAE) FreshMINDS Alessio Tei (SE) Emrah Bulut (SAE) Vicky Kaselimi (SAE)
Case Stories Paul S. Szwed (SE) Ergun Gunes (SAE) Marcella Croes (SAE) Metin U. Aytekin (SAE)
Memories Paul Tae Woo Lee (SE) Zaili Yang (SAE)
SOCIETY NEWS Michele Acciaro (IAME Newsletter Editor) Verena Flitsch (IAME Newsletter Co-Editor) Indika Sigera (SAE) BOOK REVIEWS Michele Acciaro (SE) Indika Sigera (SAE)
CHALLENGE Jasmine Siu Lee Lam (SE) Okan Duru (SAE) Rosa Guadalupe Gonzalez Ramirez (SAE)
PR & MEDIA DIRECTOR Vicky Kaselimi ART & DESIGN DIRECTOR Mariikka Whiteman
— OWNER & PUBLISHER —
INTERNATIONAL ASSOCIATION of MARITIME ECONOMISTS Jan Hoffmann Pierre Cariou Thanos Pallis Theo Notteboom
Council Members Michele Acciaro Stephen Cahoon Pierre Cariou Ana Cristina Paixao Casaca Treasurer
Ioannis Lagoudis Jasmine Siu Lee Lam Adolf K.Y. Ng Theo Notteboom Maria Lekakou
Francesco Parola Jean-Paul Rodrigue Dong-Wook Song Gordon Wilmsmeier Ioannis N. Lagoudis
President Vice President Secretary Emeritus President
Maritime Transport in the Aftermath of COP21 ME Mag
Harilaos N. Psaraftis
The COP21 climate change agreement in Paris has been hailed by many, including American President Obama, French President Hollande and many others, as perhaps one the most significant achievements of humankind thus far. Others, such as former NASA scientist James Hansen, opined that it is basically a fraud. In between, some see the agreement as
a glass half full and some as a glass half empty. The agreement continues to leave international shipping and aviation outside its mandate, something that has caused disappointment in some circles and satisfaction in some others. The basic question is, where does maritime transport stand after COP21? I will try to answer this question in this article.
Winter 2016 | Issue 4
scholarly knowledge in plain language
I note that the above taxonomy is, in many respects, artificial. Indeed, in the short run an MBM (for instance, a bunker levy) can induce logistics-based measures (such as slow steaming) and in the long run it can induce technological measures (such as designing a more fuel efficient ship). Thus far, the most sweeping piece of regulation that pertains to maritime GHG reduction is the adoption of the so-called Energy Efficiency Design Index (EEDI) by the IMO. Indeed, after years of discussion and intensive and highly political debate between developed and developing countries, the finalization of the regulatory text on the Energy Efficiency Design Index (EEDI) for new ships was agreed upon at the 62nd session of IMO’s Marine Environment Protection Committee - MEPC 62 in July 2011. I was at MEPC 62, and I remember the highly divisive
debate between developed and developing countries as regards EEDI. The basic obstacle for a consensus solution has been the concept of CBDR, which stands for Common But Differentiated Responsibilities, for which more in Section 3. 1. EEDI and EVDI EEDI is provided by a complex formula, of which the numerator is a function of all power generated by the ship (main engine and auxiliaries), and the denominator is a product of the ship’s deadweight (or payload) and the ship’s ‘reference speed’, defined as the speed corresponding to 75% of MCR, the maximum power of the ship’s main engine. The units of EEDI are grams of CO2 per tonne mile. The EEDI of a new ship is to be compared with the so-called “EEDI (reference line),” which is defined as EEDI (reference line) = aDWT-C, where DWT is the deadweight of the ship and a and c are positive coefficients determined by regression from the world fleet database, per major ship category. For a given ship, the attained EEDI value should be equal or less than the required EEDI value which is provided by the following formula. Attained EEDI≤Required EEDI=(1-X/100) aDWT-C (1) where X is a “reduction factor” specified for the required EEDI1. The reference line parameters a and c in (1) have been finalized for each ship type after a long debate within the IMO. It is interesting to note that for RoRo vessels the EEDI formulation is more complex, as some coefficients in the EEDI formula are not constant.
1 The values of X specified by the IMO are 0% for ships built from 2013-2015, 10% for ships built from 2016-2020, 20% for ships built from 2020-2025 and 30% for ships built from 2025-2030. This means that it will be more stringent to be EEDI compliant in the years ahead.
The classical breakdown of measures to reduce maritime emissions, including greenhouse gases (GHGs), divides such measures into the following three major classes: • Technological measures include more efficient engines, ship hulls and propellers, cleaner fuels, alternative fuels, devices to trap exhaust emissions, energy recuperation devices, “cold ironing” in ports, bubbles in a ship’s keel, various kites, and others. • Logistics-based measures include speed optimization, optimized weather routing, optimal fleet management and deployment, improved network design, efficient supply chain management, and others that impact the logistical operation. • Market-based measures (MBMs). These include Emissions Trading Schemes (ETS), also known as cap-and-trade, a levy imposed on fuel, and a variety of others.
Even though the rationale behind EEDI is straightforward, it can be seen that EEDI compliance effectively imposes an upper bound on a ship’s design speed, as the left-hand side of inequality (1) is a polynomial (usually quadratic) function of the design speed, whereas the right-hand side is independent of speed. Thus, whereas the real goal of EEDI is to design ships with better hulls, engines and propellers so as to be more energy efficient, an easy solution might be to reduce design speed, and, as a consequence, installed power. This may have negative ramifications on ship safety. It may also have negative effects on total CO2 emitted, as an underpowered ship would burn more fuel and hence emit more CO2 at the same speed, particularly if it tries to maintain speed in bad weather. In fact, the IMO is currently under intense discussion on how to reconcile EEDI compliance with the minimum safe power requirement. This is a highly technical discussion and the jury is still out on how the issue will be resolved. Given the baseline for the required EEDI is gradually reduced in the years ahead, it will be increasingly challenging for a ship to be EEDI compliant and have adequate minimum safe power at the same time (unless of course there is a quantum leap in improving energy efficiency in the foreseeable future).
Ship vetting schemes such the Existing Vessel Design Index (EVDI) used by the Carbon War Room and RightShip suffer from similar deficiencies. The use of EEDI for ships built prior to 2013 has not been allowed by the IMO, and there has been a long discussion justifying that decision. But EVDI, which is really EEDI applied to existing ships, is applicable universally. Industry circles report that even sister ships may have a different EVDI. Another flaw is that EVDI is calculated assuming a basic fixed design speed for the vessel, which is the speed corresponding at 75% of the ship’s Maximum Continuous Rating (MCR). However, ships do not necessarily trade at the 75% MCR speed or at any predetermined speed.
Whoever pays for the fuel (owner or charterer) will select an appropriate speed, which is a function of basically two factors: fuel price and freight (spot) rate. High fuel prices and/or low freight rates will induce slower speeds and hence lower fuel consumption. The practice of slow steaming, much prevalent these days, may involve speeds drastically lower than a ship’s design speed, and the corresponding reduction in fuel consumption will be even higher. Engines operating at 10% of MCR have been reported, for speed reductions of about 50%. This basic behavior cannot be captured by the EEDI or EVDI index, so rankings according to this index (which assumes a fixed design speed at 75% of MCR) may give a much distorted picture of the actual comparison of two vessels in real market and operating conditions. 2. CBDR and MBMs Turning now from technical to political arguments, the principle of CBDR has been widely accepted since the Kyoto Protocol. The essence of the CBDR has two aspects. The first is common responsibility, which is raised from the concept of common heritage and common concern of humankind and reflects the duty of countries to equally share the burden of environmental protection for common resources; the second is differentiated responsibility, which addresses different social and economic situations across countries. CBDR may look and feel as politically correct. It is the main political argument of countries such as China, India, Brazil, Saudi Arabia, South Africa and others to resist any sort of emissions reduction, not just for shipping but across the board, on the ground that this would impede their own economic development. But the principle is directly incompatible to the principle that any measure for GHG reduction should be nondiscriminatory, so that a level playing field is maintained for the world fleet.
Winter 2016 | Issue 4
scholarly knowledge in plain language
I had the privilege of being a member of the MBM Expert Group, which met in several sessions in 2010. Its 300-page report produced a comprehensive analysis of the 10 MBM proposals. But even though some people including myself pressed for the contrary, the report contained no recommendation on which MBM should be chosen. It did not even contain a short list of MBMs, keeping all on the table, obviously for political reasons. In fact, discussion on MBMs at the IMO level after 2010 was pretty non-productive. The period immediately after the adoption of EEDI (2011) focused on practical matters involving its implementation and there was little discussion on MBMs. A proposal by Greece in 2012 (who had submitted no MBM proposal of its own) for the IMO to decide on a short-list of MBMs (essentially a bunker levy and ETS) was rejected. All MBMs were kept on the table, with the exception of the one by the Bahamas, which was withdrawn.
efficiency and CO2 reduction potential of ETS vs. a levy scheme and concluded that a levy on emissions would be the most efficient incentive-based option for reducing emissions and could be relatively easy to implement. Further, from an investor’s perspective, facing a predictable price and basing one’s investment in green technologies on that price is far less risky than facing the rather unpredictable price of an ETS. Investors typically respond to price, not a cap on emissions2. At the IMO, and in addition to the lack of consensus among the MBM proposers, the group of developing countries were as much against any MBM as they were against EEDI, particularly after they lost the EEDI vote in 2011. Their main objection was mainly on the ground that MBMs are not compatible with the principle of CBDR. Another issue of disagreement has been how monies collected by the MBM would be used for the benefit of developing countries (capacity building, technology transfer, etc.) Among industrial stakeholders, the International Chamber of Shipping, BIMCO and several ship owners associations came out against an ETS, on the ground that it would be unworkable for the shipping industry. Interestingly enough, these include the German and Norwegian ship owners associations, even though their national maritime administrations were for ETS. Then in May of 2013 the MEPC decided to suspend discussion on MBMs, at least for the time being. This reflected a channeling of the discussion towards the subject of Monitoring, Reporting and Verification (MRV) of CO2 emissions.
It should be noted that a US Congressional Budget Office report (CBO, 2008) has compared the
2 For more on MBMs including a comparative analysis see Psaraftis (2015).
In addition to causing a rift between developed and developing countries, in shipping CBDR has claimed a distinct victim. This was manifested by the suspension of the IMO discussion on MBMs in 2013. In 2010, an Expert Group was appointed by the IMO’s Secretary General after solicitation of member states and was tasked to evaluate as many as 10 separate MBM proposals, submitted by various member states and other organizations. All submitted MBM proposals described programs and procedures that would target GHG reductions through either ‘in-sector’ emissions reductions from shipping, or ‘out-of-sector’ reductions via the collection of funds to be used for mitigation activities in other sectors that would contribute towards global reduction of GHG emissions. The IMO formulated 9 criteria for the evaluation of the MBM proposals.
INPLAIN 3. MRV Establishing an efficient and effective international framework on MRV is of paramount importance. It is clear that MRV by itself may not lower emissions, but can be the first and necessary step for subsequent measures to reduce them. In that sense, the discussion on possible MBMs, suspended at IMO in 2013, can only resume if an efficient and effective global MRV system is established. The same is the case for any other emissions reduction measures that may be implemented at the operational level, or even to see what retrofit measures are the most effective. This means that any MRV system will have to be designed with a longer term view on what will be the next step, after the MRV is established. To me at least, it is clear that the next step will be an MBM.
The MRV story is indicative of how the political process as regards maritime GHG emissions may work. The purpose of MRV is to monitor the energy efficiency and greenhouse gas emissions of the world merchant fleet. In order to document and track global energy efficiency gains, data from ships must be collected and a robust data collection and reporting system must be established. Already the EU rushed to adopt Regulation 2015/757 on MRV, the implementation of which is currently under discussion. The Regulation applies to vessels above 5,000 GRT of all flags conducting voyages into, out of and between EU ports and will require annual reporting of their CO2 emissions in line with an approved monitoring plan.
The IMO MRV track is similar but has some key differences with the EU scheme, mainly on cargo reporting which is considered mandatory in the EU scheme while this is not the case at the IMO level. Discrepancies between what will be agreed on a global level and any regional legislation can create distortions and a non-level playing field. For instance, a ship calling on Kaliningrad, Russia, would be able to
avoid the more stringent EU MRV regime. If so, one might see that Baltic port establish itself as a regional hub, creating distortions in intermodal flows and ultimately more CO2 in the supply chain. The same may be true for African ports in the Mediterranean or elsewhere. It is also interesting to note a basic difference between maritime transport and other transport modes (road in particular) as regards MRV. Whereas in road transport whatever emissions reduction measures are imposed on the manufacturer and in fact on a fleet level, in maritime transport it is the operator who is the main responsible player and in fact this has to be on an individual ship level. The reason for this difference is surely political, but it may have ramifications as in some instances shipping may compete with land based modes and in fact may be losing at the competitiveness front, a possible result being more CO2 overall. 4. Concluding remarks Would issues such as the above be handled in a better way had shipping been included in COP21? Even though as a matter of principle all anthropogenic activities ought to be included in a global agreement, COPn (with n â‰Ľ21) is a group at least as highly political as the IMO or any other, not to mention that it may lack the expertise to address detailed technical maritime issues, should this be necessary. In addition, CBDR is at least as powerful an argument in COPn as it is in the IMO. So I really do not see what COPn can handle that the IMO cannot. More fundamentally, in a world in which gasoline prices in the US are 1/2 to 1/3 of what they are in Europe and in other parts of the world, and in which fossil fuel prices are currently rock bottom, I believe that any prospect for a global GHG reduction should be viewed with a (big) grain of salt. Other than honorable intentions, I see nothing in the COP21 agreement
Winter 2016 | Issue 4
scholarly knowledge in plain language
that would really induce significant fuel consumption reductions. One measure that would work would be a significant fossil fuel levy on a global level, something that would induce both technological changes in the long run and logistical measures in the short run. It would do so to the same extent we see differences between the US and the European (or Japanese) automobile fleet profiles. For a maritime transport example, Fig. 1 shows annual CO2 emissions for a Very Large Crude Carrier (VLCC) as a function of bunker price and spot rate. Emissions reductions are attributed to slow steaming as a response to the bunker price/freight rate combination. It can be seen that the reductions can be significant. However, who would possibly entertain a bunker levy so that total fuel cost becomes 800 or 1,000 USD/ ton? Even though such a solution would be simple and effective, I consider the political prospects of such a measure being agreed upon, either regionally or globally, as practically nil.
I end with an interesting statistic. The US Environmental Protection Agency (EPA) estimates that ruminant livestock such as cows, goats, and friends, annually produce about 80 million tons of methane (CH4). Given that CH4 is about 30 times as potent a GHG as CO2, this translates to about 2.4 billion tons of CO2-equivalent emissions per year. By comparison, and according to the third IMO GHG study of 2014, which used 2012 fleet data, international shipping annually emits about 0.8 billion tons of CO2 (Smith et al., 2014). Whether one of the main elements of a solution to the global warming problem is to eat less beef is an interesting subject to discuss. For one thing, it looks healthier, and the cows would also like it. Irrespective of this, and for at least the reasons outlined earlier, the international scene for GHG emissions reduction has been rendered way too complex and political. In spite of the COP21 agreement, this may hinder prospects for spectacular progress in the years ahead, and this includes maritime transport.
Fig. 1: Annual CO2 emissions (single VLCC tanker) as a function of fuel price and spot rate. WS is the Worldscale index. Source: Gkonis and Psaraftis (2012).
References CBO (2008) “Policy Options for reducing CO2 emissions”, The Congress of the United States, Congressional Budget Office, February. Gkonis, K.G., and Psaraftis, H.N., (2012) “Modelling tankers’ optimal speed and emissions,” Archival Paper, 2012 SNAME Transactions, Vol. 120, 90-115. Psaraftis, H. N., (2015), “Green maritime transportation: market based measures,” in H.N. Psaraftis (ed.)Green Transportation Logistics: in Search for Win-Win Solutions, Springer International Series in Operations Research and Management Science. Smith, T. W. P., Jalkanen, J. P., Anderson, B. A., Corbett, J. J., Faber, J., Hanayama, S., O’Keeffe, E., Parker, S., Johansson, L., Aldous, L.,Raucci, C., Traut, M., Ettinger, S., Nelissen, D., Lee, D. S., Ng, S., Agrawal, A., Winebrake, J.J., Hoen, M., Chesworth, S., Pandey, A. (2014), Third IMO GHG Study 2014, International Maritime Organization (IMO) London, UK, June.
Harilaos N. Psaraftis Professor, Department of Transport, Technical University of Denmark
Harilaos N. Psaraftis is Professor of Transport Optimization at the Technical University of Denmark (DTU), Department of Transport. He has a diploma from the National Technical University of Athens (NTUA) (1974), and two M.Sc. degrees (1977) and a Ph.D. (1979) from MIT, USA. He has been Assistant and Associate Professor at MIT from 1979 to 1989 and Professor at NTUA from 1989 to 2013. He has participated in 20 or so EU projects, and has coordinated 3 of them, including project SuperGreen on European green corridors (2010-2013). He has been a member and chairman of various groups at the IMO, and has also served as CEO of the Piraeus Port Authority (1996 -2002). He has published extensively and has received several academic and industry awards. His latest book is entitled “Green Transportation Logistics: The Quest for Win-Win Solutions” (Springer International Series in Operations Research and Management Science, 2015).
Winter 2016 | Issue 4
scholarly knowledge in plain language
Profession & Practice
Terminals, Logistics and its Players: Challenges from a Pivotal Mediterranean 1 Position
1 The article is a summary of the 2nd Annual Report on Maritime economy edit by SRM (2015). Further information on www.srm-maritimeconomy.com
Winter 2016 | Issue 4
voice of professionals
The second edition of the Annual Report “Maritime Economy” embodies the fulfilment of one of the objectives of the new research project SRM launched in 2014: the Permanent Observatory on Maritime Economy.
Firstly, it is necessary to point out that, according to the last Reports by SRM, the freight traffic of goods in the MED basin has increased by more than 123% in the last 14 years and that our Sea houses around 19% of the total of global freight traffic; the percentage was 15% in 2005.
The initiative resulted in the creation of the portal www.srm-maritimeconomy.com, a scientific website aiming at strengthening a subject that has been present for years in the research activities of our Centre of Studies.
The first 30 ports of the Mediterranean have handled 44 million TEU in 2013, while in 1995 they moved 9,1 million; a 382% increase.
The Mediterranean basin will prove as one of the most important areas for trade and will show a significant growth over the next years. This will be shown by taking into account the role of megaships and of the big alliances in the Mediterranean. After that, this article will focus on the situation of Italian ports in comparison with the other major competitors that operate in the Mediterranean area. As it is shown in the Annual Report on Maritime Economy, Italian ports are inadequate to compete with the ports of Tanger Med, Port Said and Algeciras, this will be proven by taking a closer look at the ports of Southern Italy.
In this particular phase of the maritime economy there is a number of events in motion, which will most likely change the choices of shipping routes to and from the Mediterranean, intensifying its role as the core of worldwide trade. The Asia Med and Asia North Europe are increasing their influence, and they are the very same routes that “force” the naval passage in the Mediterranean basin; not coincidentally they are the routes with the biggest volumes of goods going from North toward South (the passage from the Mediterranean toward Suez and the Middle and Far East) and from South toward North (the passage of ships coming from the Middle and Far East headed toward the Mediterranean and North Europe).
In the first part, the Report intends to take stock of the current situation and prospects of Italian maritime economy in the competitive environment of the Mediterranean, focusing also on the strategic role that the South can play so that our country can seize the development opportunities offered by the Blue Economy. The second monographic part will show an analysis of the Northern and the Southern Range ports.
From a SRM analysis on a panel of European, North African and Asian port areas, we see that in 2014 the port areas of the Mediterranean (Eastern Shore, Western Shore and Southern Shore) have reached a quota of 33% on the container market (they have gained 6 percentage points since 2008), versus 42% of the northern range, which lost 5 percentage points in the same timeframe.
Profession & Practice
As such, the strategic role of the Med-Gulf-Middle/Far East axis seems to gain an escalating importance. On these premises, many European and MENA area Countries are “working” on increasing the competitiveness of the port and logistics systems; they do so in order to attract even more investment and to allow the large container shipping carriers to dock in the most well-equipped wharfs, the ones that allow for quick embarking and disembarking procedures of the container Mega-Ships. The project, currently underway, that will have the most explosive impact on the prominence of the Mediterranean is the doubling of the SUEZ Canal. The Egyptian government is finishing an infrastructure that will make it possible to double the number of ships transiting daily and to drammatically decrease travelling times; the benefits will not only come from the increment of the collection of toll money (that will rise from 5 to 13 billion dollar per year), but also from the massive manufacturing and logistics investments that will be created as “subsidiaries” to the canal. From this, it can be concluded that there will be important consequences on the volume of goods transported through the Suez Canal. The Suez Canal project, the new Naval Alliances, the new investment in North African and Northern Range ports seem to be the undergoing challenges to compete with, or to harness new opportunities from.
The relevance of SUEZ is surely the element that seems to be bound to transform the Mediterranean into a new sea with more trades, more routes and, consequently, greater competitiveness among ports.
The Arabian Gulf, as mentioned earlier, is an area which is lately affirming its strategic importance; the relations between the Mediterranean Countries
and the Gulf are ever-increasing, with two elements proving this point in particular: the North toward South transits from the Suez Canal headed to the Gulf have increased by 339% in the last 14 years, and in the same span the South-North transits have increased by 175%. This translates into a total of over 320,9 million of tons of goods; a number which increases year after year and that is reaching an impressive size. As a matter of fact, this is one of the main routes taken by ships that transit through Suez. The so-called “Gulf” area, as such, is acquiring more and more strategic features in the geography of worldwide trade. In this context it is clear that bigger volumes of goods require the employment of bigger ships. When looking at the order books (the orders of new ships), a significant tendency in the enlargement size of the ships can be observed. All the main carriers have the building of large ships underway; the April 2015 data highlight that by 2018, 221 Megaships will be at sea, with sizes between 13,3 and 21,0 thousands of TEUs. The average annual growth rate of the triennium period 2015-2017 for the 18-21000 TEUs category will be over 66% a significant figure, compared to that of the whole container fleet which amounts to 6,2%. The overall capacity of the fleet will increase to 22 million TEUs. This phenomenon is also causing the need to create new investment in ports, since being able to accommodate giant ships means having control systems, wharfs, new cranes and new tug boats; so, this leads to investment in logistics innovation, terminal computerization and requalification of workforce, meaning investment in human capital. In addition to ship size, something else has been underway for quite a long time already, namely the phenomenon of ship alliances between the large players, under the perspective of containing expenses and optimizing the holds, as well as rationalizing the
2 G6: Hapag Lloyd, NYK Lines, OOCL, Hyunday, APL and MOL; CKHYE: K-Line, Yang Ming, Hanjin, CSCL and Evergreen.
Winter 2016 | Issue 4
voice of professionals
After analysing the prospects of growth of the Mediterranean Area it is necessary to take into account the issues of competition and competitiveness. As a matter of fact, the Northern European and North African port systems have always played an important role because of their infrastructures and in their unparalleled logistics efficiency, especially in the intermodal segments (sea-rail or sea-road trading of goods), other than having an ample availability of spaces and wharfs to deposit goods and accommodate ships. The most significant data highlights how the port arc of the Northern Range held a share of the container market (taking into account the trade of North Europe, Mediterranean and Black Sea areas) amounting to 43% in 2014 (it amounted to 47% in 2008) and that the ports of Hamburg, Antwerp and Rotterdam are heavily investing in infrastructures and logistics. Some other realities are also proposing themselves as competitors: this is the case, for example, of Tanger MED in Morocco, whose performances in the traffic of goods have been steadily increasing their volumes; by the end of 2014 it had handled over 3 million TEUs (unit of measure of containers) with a 20,7% increase compared to 2013 (the increase from 2012 to 2013 amounted to 40%) and now, in the Mediterranean, its market share is about 10%. As it commonly understood an important role in the game of competitiveness is played by infrastructures which have to be looked after and created in every port; however, placing all the bets only on the
infrastructures is a near-sighted, maybe even losing, choice. One should take into account a port policy coordinated and shared with the operators; this policy must consider the ports of every Country as key players of the economic development and, as such, worthy of public financing or of being able of adopting mechanisms that could facilitate private investment. Itâ€™s essential to have a high-skilled terminal operator in each port that may generate opportunities in terms of jobs, investment and professionalism; it is no coincidence that the spaces of every large port infrastructures are managed by top terminal operators. Terminal operators develop and favour the creation of intermodality: trains continuously transporting goods, lorries entering and exiting the passages and heading to activities well-kept and secure highways. As time went by, the management of terminals became one of the main port activities and not coincidentally the first 5 terminal operators in the globe have come to hold more than 50% of the share of the worldwide container handling (in the world ranking, many operators are from the Far East, from the Gulf or from Germany). The Italian port system faces the new challenges with a traffic trend in a stasis stage, since there are realities which are losing traffic, while others are gaining it, but there are no breakthroughs in terms of attractiveness of our ports, and very few are able to accommodate large ships. In the light of everything discussed before, its is necessary to employ investments in infrastructures and human capital, and to devise new strategies to attract companies. Itâ€™s always paradoxical how Italy has such a relevant geographical position but is not able of to play a major role as protagonist of the world, maritime-wise.
journeys of the great maritime routes. Two of the most relevant alliances are: the 2M (Maersk, MSC), the Ocean Three (CMA CGM, CSCL, UASC), which are bound to take control of the routes, especially in the Mediterranean: these two alliances are going to control respectively 39 and 27% of traffic on the sole ASIA-MED-ASIA route (one of the busiest of the globe). An important role is also played by the deals called G6 and CKHYE2, which on the Asia North Europe route are going to acquire a market quota amounting respectively to 23% and 26%.
Profession & Practice
From an analysis of the Liner Shipping Connectivity Index, we see that Italy ranks 17째 in 2015, and has been fluctuating around this position over the last 10 years, always behind Holland and Germany. It is true that we occupy the first place in the Mediterranean and the Black Sea for Short Sea Shipping and that our shipbuilding and logistics companies are present on an international scale, but this should be a strong motivation to bet on the maritime sector; today this field in its broader definition amounts to more than 43 billion euros of value added, more than 220 billion of import-export, and almost 800thousand jobs.
Our weaknesses seem to be lack of planning and public resources, and the bureaucracy needed to carry out the works; on the second point we can quote the statistics of the Ministry of Economic Development which estimated that it would take 11,6 years to realize a 100 million euros of works, while Tanger Med was made operative in just 6 years.
For the shipping of goods with import-export, the Roads and the Sea are the most utilized means of transportation in our Country: while the goods bound to EU are more road-prevalent, the ones bound toward the great markets of North Africa, the Gulf, Middle and Far East and the United States, are mostly transported by ships. Asia, amounting to 40% on the total, is still the main destination area of our maritime shipping trade. When considering the qualitative aspect of the goods shipped by sea to and from Italy, we can see that the first 5 product categories weigh with over 65% on the total value and they include, first of all, machinery and mechanical apparatuses. The trade of said goods involves, in particular, the Countries of Eastern Asia, of Northern America and of the Middle East, and it mostly includes the outgoing flows from our territory. Right behind it we find the categories of carbon fossils, oil and natural gas, of
metals, of coke and refined petroleum products, and, finally, of transport. Furthermore, it should be noted how, among these categories, the refined petroleum products stand out, amounting to almost 25% of the total. It is clear, and we should stress this, that the internationalization of our companies is strictly associated with our maritime system and that the definition of any kind of support to the export should march alongside with the recovery of a new logistics competitiveness. In the following paragraph we will show some conclusions of the Report. If we consider that 33,7% of value added of maritime economy comes from the Southern Italian Region (14,7 billion euro) and that 38,6% of the total of workforce generated by the maritime economy is located in the South we immediately understand of the importance of this territory for the development of the sector. Infrastructure-wise, the 12 ports of the Southern Italian Region handle 45,7% of the total of the container traffic and 47% of the overall goods traffic. The importance of maritime shipping for Southern companies is also reflected in the foreign trade data; the commercial trade of the Southern Italian Region is realized by 60% via maritime ways, with a value of almost 55 billion euro. Therefore, in the context we provided, the Southern Italian Region has to be framed as a protagonist in the relaunch strategy of the Country system, due to its port systems and its shipping; the sea is an industry with a presence and an historic value for the South, which overlooks directly the middle of the Mediterranean, and that can count not only on an important logistics system but also on companies that internationalize and have a need for reaching the markets efficiently and rapidly.
Winter 2016 | Issue 4
voice of professionals The South also takes the toll of the system’s diseconomies, such as bureaucracy, the absence of dredging, the environmental problems and the lack of important infrastructural projects.
What should be done to increase the international attractiveness of companies? Free Zones can provide us with one answer: some Countries have based the key to their entrepreneurial success on said areas; the United Arabian Emirates, China, North Africa. The prerequisite of the synergy between Ports and Free Zones is, in fact, the bond between infrastructures and companies: the former provide logistic services and quality shipping to the export sector, while the latter have the ports working with their goods, which are traded around the world, and can take advantage of bureaucratic, custom and tax benefits. Creating Free Zones doesn’t mean creating “territorial disorder”, as it still necessary to exercise control on the policies for international exposure, although in this moment of our economy we cannot ask for a push in exportations without granting two strong arms to those who are asked to do the lifting: the ports next to successful Free Zones seem to be able to lend a hand. The Free Zones have increased in the last thirty years throughout the world, going from the 79 of 1975 to the 3500 of 2005. The estimated workforce amounts
to around 65 million of units, while the weight of the Free Zones on the total export of one Country is estimated to be 60%. The research has a specific chapter related to the analysis of this point.
Alessandro Panaro Head of Maritime and Mediterranean Economy Dept. at SRM, Intesa Sanpaolo Banking Group.
Transport Economist. Head of “Maritime & Mediterranean Economy” Department of SRM (a Research Centre based in Naples, linked to Intesa Sanpaolo Banking Group). Coordinator of the Observatory on Maritime Transports and Logistics and of the Observatory on Mediterranean Economy. He has conducted many researches on the economy of the sea, ports, airports, interports, railways, logistics, infrastructure, in collaboration with research centers and international universities. He has been invited as speaker at numerous scientific conferences, meetings and seminars nationally and internationally. He has authored of scientific essays and articles published in scientific and technical journals. He coordinates the SRM’s international magazine: Dossier European Union. Member of Scientific Committee of SOSLog, Association for Sustainable Logistics (www.sos-logistica. org). He is also member of the Italian Association of Transport and Logistics Economists (SIET) and of The International Propeller Club. E-mail: email@example.com
Staying on the subject of public finance, throughout history we always had difficulties in spending efficiently and quickly the Community funds the Southern Italian Region received by the various planning; the delay with which we employ the funds of the PON Transports and the POR aimed at the development of logistics can be considered structural. The incoming planning of 2014-2020 will allocate around 1,8 billion euro for PON Infrastructures which will be key in connecting South Italy with the rest of the Country and with Europe. We need to take full advantage of these resources, and we will have to streamline the processes aimed at letting the realization times of a work to catch up with port competitiveness.
Bananas, Ecuador’s Main Export Product: In Search of an Efficient and Competitive Port Logistics Chain through the Port of Guayaquil
Andrea Carolina Moreno T., Ximena María Córdova V., Rosa Guadalupe González R.
Winter 2016 | Issue 4
voice of young generation
For Ecuador, international trade is a fundamental activity for its economy, as it has been characterized as a global exporter of raw materials, especially agricultural and petroleum products. In past decades, Ecuador has been the leading exporter of bananas around the world . This is a noteworthy characteristic, since bananas are the most exported fresh fruit in the world . An average of 5.3 million tons of bananas is exported every year1, which represents around $1.6 billion dollars per year. The main destination of Ecuadorian bananas is Russia, (22%) followed by the United States (17%)2 . Due to the large volume of cargo handled, the fruit must be transported by sea, in refrigerated (reefer) containers to assure product quality.
The Port of Guayaquil, which is located on the south west coast of Ecuador, has become the main port of the country, as it handles the largest amount of nonoil cargo in the National Port System. In 2013, this port transferred 11.08 million tons of cargo and 1.06 million of TEUs3, which represents approximately 64.29% of total cargo handled by non-oil ports in the nation . One of the portâ€™s main export products are bananas, as they are harvested in nearby regions. The exportation of bananas is a complex process because it requires the completion of various activities and involves numerous stakeholders, such as: Customs, Narcotics Control Police, Exporters, Port Operators, Shipping Agencies, Freight Forwarders and Customs Brokers, to name a few. The main purpose of this article is to describe, model and analyze the physical and documentary procedures carried out by the parties involved in the banana export logistics chain. The goal is to achieve a deeper understanding of current conditions in order to identify inefficiencies and bottlenecks in current process. Based on the findings, suggestions for improvement will be proposed to contribute to the facilitation and simplification of the existing processes. This will bring us one step closer to building an efficient and more competitive logistics chain. This document is structured as follows: The first section presents a short explanation of the methodology, followed by the description of the banana export logistic chain. The next section presents the analysis of the current situation. Finally, a set of conclusions and recommendations are provided in order to summarize the main findings and propose future work opportunities.
1 Average number of tons exported between 2000 and 2014 2 Average percentage of participation between 2000 and 2014 3 TEU: 20-foot equivalent unit. â€œIt is a statistical unit based on an ISO container of 20 foot length (6.10m) to provide a standardized measure of for counting containers of various capacities and for describing the capacity of container ships or terminals.â€? 
International Trade has constantly increased around the world, especially in recent years as maritime services have benefited by considerable expansion fostered by globalization . Nowadays, there is more participation of Latin American and Caribbean ports as developing countries are expanding their involvement in a range of different maritime activities . Between 2005 and 2010, these ports represented 88% of net container growth throughout the Americas . With the expansion of the Panama Canal as well as the use of bigger ships, shipping lines are improving their routes to achieve higher economies of scales. This means, Latin American ports face important challenges in terms of transportation infrastructure, logistics procedures, information technologies systems and a sustainable port-city development (provided that most of the ports are located within a city).
Fig 2: International Supply Chain Model
Methodology Source: (United Nations, 2009)
Business Process Analysis (BPA) was the methodology used for this study. This powerful tool was developed by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Economic Commission for Europe (UNECE) . It seeks to obtain, document and analyze existing processes. It presents a step-bystep approach to process analysis and generation of proposals for improvement . Figure N°1 shows a brief description of each step.
Fig 3: Banana Export Process
Fig 1: BPA Methodology
associated with it. A total of 12 processes have been identified to complete the banana shipping procedure (see Figure 3).
Source: (United Nations, 2009)
All steps were followed and completed. However, only the main points and findings will be described in this article.
Analysis of current situation A. Semi-Structured Interviews and export process modeling
Banana Export logistic chain description According to the UN/CEFACT , the international supply chain model should be represented as a “Buy-Ship-Pay” model (Figure 2). Based on this recommendation, this study seeks to describe and model the “Ship” macro-process and sub-processes
4 United Nations Centre for Trade Facilitation and Electronic Business.
In order to obtain and describe accurately all of the procedures needed to export bananas through the Port of Guayaquil, exhaustive documentary research and semi-structured interviews were conducted. During a period of 6 months, 15 interviews were conducted with port administrators, customs agents,
Winter 2016 | Issue 4
narcotics control police officers and exporters. The last step included documenting processes in flowcharts to facilitate their understanding and relationships. Once the business process mapping was completed, an in-depth analysis of the “as-is” processes was made, in order to establish the strengths, problems, inefficiencies and bottlenecks of the banana supply chain. Considerable strengths include standardization of processes inside the port. Processes are documented and occur in concordance with the ISO 9001 Quality System. Besides, manuals and formats that need to be filled to meet the port export requirements can be easily downloaded from the port’s website, which is a time saver for users. Furthermore, most actors are satisfied with the port’s infrastructure and opening times. Regarding the weaknesses, it was found that drug inspections were one of the main business processes with potential for improvement, as it disrupts the smooth running of the bananas supply chain. The main problems that were detected included: • Loss of cold chain during inspection • Fruit damage due to wrong handling • Long waiting times and permanent delays • Lack of proper communication methods On this context, suggestions for improvement were made: • Containers GPS Locator: Provides real time location and helps to determine if containers have left a specific route. It also offers information about temperature changes and doors being opened/closed (Figure 4).
voice of young generation
• Climate Control Zone: Construction of a climate control zone so drug inspections can be done at the right temperature without jeopardizing the quality of the fruit. It is noteworthy that this practice is not new and it has been implemented in various ports around the world, e.g., Port of Algeciras in Spain (Figure 5) or Port of Felixstowe in the UK (Figure 6). Fig 5: Aerial View of Inspection Zone
Source: (APDG, 2013)
Fig 6: Internal View of Inspection Zone
Fig 4: International Supply Chain Model
• Time Study: To determine if there is a significant statistical difference between inspection times every day of the week. If so, the port could allocate more resources for that day. In addition, it will be possible to determine whether the cycle Source: (UniTrack, 2011)
Source: (Port Strategy, 2011)
FreshMINDS time is higher during the holidays compared to normal days. This hypothesis could be tested by recording times and in case of a positive response, the port should take action in order to make sure that there are enough stevedores, forklifts, ramps and all needed resources during the 365 days of the year. • Analysis of waiting lines: An analysis could be developed to define the optimal number of servers needed to decrease the waiting times and therefore, the permanent delays. • Port Community System (PCS5): The implementation of a port community system or a port single window is necessary in order to facilitate information exchange and simplify the procedures. In this way, the exporters and the rest of actors of the logistics chain under study (Figure Nº7) could receive information in a matter of minutes and they would have a wider margin of time to plan their activities and resources. Fig 7: Actors in the Port Community System
efficient port operations avoid unnecessary costs and delays and therefore facilitate international trade. Overall, the exportation of bananas is a complex process as it integrates different actors and processes at different times and places. The interviews with relevant actors of the supply chain were helpful when obtaining, documenting and analyzing the “asis” processes. BPA was useful as it revealed several strengths and weaknesses of the banana supply chain. Results showed that drug inspections were one of the most problematic processes in this supply chain. It is vital to understand that while it is true that drug inspections are critical, their ultimate goal is to ensure that Ecuadorian products are drug free and therefore they should not disturb the functioning of the supply chain. In this context, various solutions were proposed so that security levels of the export process may be guaranteed but reducing idle times. These solutions could also help to increase the number of inspections done per day, as of today, the port of Guayaquil inspects an average of 3%-3,5% of all the containers, while the world standard is 7%. It is important to mention that researchers had limited access to large amounts of data; therefore future research on this matter should gather more data in order to obtain more conclusive results. This way a simulation model could be developed to test the efficiency of the proposals by comparing the proposal with respect to the current situation. Finally, the implementation of a port community system is fundamental in order to improve current information flow. Therefore, future research on how this system can be implemented is suggested. References
Conclusions and recommendations for further research
Banana exports by sea are one of the main economic activities in Ecuador and that is why all necessary resources should be provided in order to ensure efficient operations and competitiveness in the international market. It is important to remember that
 World Trade Organization. (2013). Maritime transport. Website: http://www.wto.org/english/tratop_e/serv_e/transport_e/transport_maritime_e.htm  United Nations Conference on Trade and Development. (2012). Review of Maritime Transport 2011., (pág. 204). New York y Ginebra.  Rodrigue, J.-P. (2012). The Benefits of Logistics Investments: Opportunities for Latin America and the Caribbean. Inter-American Development Bank.
5 PCS: “A Port Community System is an electronic platform which connects the multiple systems operated by a variety of organisations that make up a seaport, airport or inland port community. It is shared in the sense that it is set up, organized and used by firms in the same sector – in this case, a port community” .
Winter 2016 | Issue 4
Andrea Carolina Moreno T. Industrial Engineer, Universidad San Francisco de Quito in Ecuador
Andrea Carolina Moreno T. is an Industrial Engineer from Universidad San Francisco de Quito in Ecuador. Her research interests focus on optimization methods and its applications in service companies. She has worked as Data Analyst at the Volvo Group in the United States of America and as Project Engineer at Engipetrol S.A., an important oil service company in Ecuador. She currently serves as Data Analyst at Gimpromed Cia. Ltda., a company that distributes medical supplies to the main hospitals and clinics in Ecuador.
voice of young generation
Ximena María Córdova V. Dean, the School of Engineering Researcher, Universidad San Francisco de Quito, Ecuador Ximena María Córdova V. is Dean of the School of Engineering as well as a researcher at Universidad San Francisco de Quito, Ecuador. She holds a bachelor degree in Mathematics from the Escuela Politécnica Nacional (Ecuador), a Master in Actuarial Science and a Master in Quality, Management and Productivity from University of Iowa and a PhD in Industrial Engineering from Wichita State University. Her research areas are related to the analysis and optimization of green supply chain and CO2 emissions as well as in ergonomics.
Rosa Guadalupe González R. Professor and researcher, Universidad de Los Andes, Chile
Rosa Guadalupe González R. is a professor and researcher at the Universidad de Los Andes, Chile. She holds a bachelor degree in Industrial Engineering from the Technologic Institute of Morelia, a Master in Industrial Engineering from Arizona State University, a Master in Quality and Productivity Systems and a PhD in Engineering Sciences from Monterrey Tech, Mexico. Her research areas are related to the analysis and optimization of the port logistic chain and trade facilitation.
 Food and Agriculture Organization of the United Nations (FAO). (2014). FAOSTAT. Website: http:// faostat3.fao.org/browse/T/TP/S  Food and Agriculture Organization of the United Nations (FAO). (2013). FAOSTAT. Website: http:// faostat3.fao.org/faostat-gateway/go/to/browse/rankings/countries_by_commodity/S  Banco Central del Ecuador. (n.d.). Estadística Comercio Exterior. Website: http://www.portal.bce. fin.ec/vto_bueno/seguridad/ComercioExteriorEst.jsp  Ministerio de Trasporte y Obras Públicas. (2013). Estadísticas Portuarias y de Transporte Acuático 2013.  EUROSTAT, ITF, & UNECE. (2010). Illustrated Glossary for Transport Statistics (4th ed.). OECD Publishing.  United Nations. (2009). BPA Guide to Simplify Trade Procedures. Website: http://tfig.unece.org/contents/unnext-guide-bpa.htm  European Port Community Systems Association. (2011). How to develop a Port Community System. Website: http://www.unece.org/fileadmin/ DAM/trade/Trade_Facilitation_Forum/BkgrdDocs/ HowToDevelopPortCommunitySystem-EPCSAGuide.pdf
A Vehicle Booking System to Improve Landside Coordination in a Chilean Port Terminal Renzo Alberti, Guillermo Krebs, Francisco MejĂas. ME Mag
Today, global commerce serves as a key element in the development of economies, and it is increasing each year. In this context, maritime ports, as an echelon of the transport chain, play an important role in the competitiveness of global supply chains. With the 28 constant increasing of container traffic volumes, and the limited infrastructure capacity of the ports, long
truck queues and waiting times may occur at the gate of container terminals if there are no coordination mechanisms implemented at the ports. This leads to inefficient resource utilization for both the port terminal and the truck carriers; as well as detrimental social impacts to the port cities due to congestion and emissions caused by truck traffic.
Winter 2016 | Issue 4
voice of young generation
VBS or TAS are web based platforms that provide information connecting truck carriers and the port terminal(s) by scheduling truck arrivals based on specific standard service levels of the port terminal. This allows the port terminal to control demand flows and spread out demand arrivals by controlling the timing of truck arrivals, while truck carriers are able to reduce waiting times and truck turnaround times at ports. However, flexibility of trucks arrivals is more limited as trucks are no longer arriving randomly. Designing the operating rules for this type of system is not a straightforward task and collaborative schemes where all the stakeholders involved are able to contribute and communicate are recommendable in order to achieve the expected benefits. One of the first case studies reported in the literature is related to the appointment system implemented in the ports in California, U.S. Another example corresponds to the Australian ports, which since 2005, implemented a VBS that is currently operated by the company 1-Stop. The program smartPORT logistics, leaded by the Hamburg Port Authority (HPA) is another illustration of applications that have been developed to support traffic and trade flows control. The benefits of implementing a VBS, considering case studies in Europe and United States have been analyzed in (Giuliano and OÂ´Brien, 2008; Zhao and Goodchild, 2013; Zehendner and Feillet, 2014) among others.
Several efforts have been undertaken in developed countries to improve coordination of traffic and trade flows, but few cases have been analyzed for Latin American and Caribbean (LAC) ports. LAC ports are currently facing important challenges as an emerging region that is increasing the participation of worldwide trade volumes. This is imposing more challenges and pressure at ports, which are facing significant levels of congestion at their accesses and externalities to their port-cities due to emissions and noise. In this article, we consider the case study of a Chilean port terminal and propose the design of a VBS. The main contribution of this article relies in the analysis of a case study for port in LAC, particularly a Chilean port, considering specific characteristics and limitations of the port. However, our proposal is not superior to other VBS already implemented in developed countries. 2. Case study: a Chilean port terminal We consider a Chilean port terminal that operates in the Central region of the country, at the main Chilean port. Currently the port terminal does not control truck arrivals for export operations, while for import containers there is an appointment system in which the terminal operator set a specific time to pick up an import container (no collaborative scheme is used). In this article, we focus only in the export operations as a first step. During a stacking time window of about 5 to 7 days prior to the arrival of each ship, trucks arrive randomly to deliver an export container. Figure 1, shows the trucks arrivals on Friday for export cargo at a port terminal (average of 2012).
1 See http://www.1-stop.biz/ for the VBS of Australian ports. 2 See for instance the Truck Appointment System that Norfolk International Terminal is about to launch
Collaborative solutions to coordinate truck arrivals at the gate of ports have been proposed and implemented in several ports worldwide with the aim of reducing truck congestion at gates and improving truck productivity for drayage operations (e.g., Ports of Long Beach and Los Angeles in USA, Australian ports, etc.). These types of solutions are referred to as Vehicle Booking Systems (VBS)1 or Truck Appointment Systems (TAS)2. We will indistinctly refer them as VBS.
FreshMINDS Fig 1: Export containers arrivals at port terminal (Friday)
As it can be observed in the previous figure, there exists low utilization of the port terminal in the night shift. This represents an opportunity area to balance the utilization of the port terminal resources. For instance, at Australian ports, night shifts are used for massive movements of containers. This includes transport carriers that require picking up a determined number of containers (e.g. more than 50 containers) and can be done on a shuttle circuit.
At the yard, reachstakers are employed for the stacking of export containers at the corresponding blocks that have been assigned to each section of containers. Sections of containers are defined based on the vessel, port of destination, and the type of container and weight. Due to the random arrival of export containers throughout the day, reachstackers assigned to stacking operations exhibit low productivity compared to other tasks performed in the port terminal.
The port terminal provides a standard level of service, of one hour, for the truck turnaround time. If this time is exceeded, then the port terminal compensates for the delay. This is only considered once the truck has entered through the gate. Due to congestion and
the need to fulfill this key performance indicator, it is possible that containers are stacked at any position. This increases the number of relocation moves as containers will have to be repositioned later. Motivated by this situation, we propose a VBS that we refer to as OpenGate. OpenGate does not provide better functionalities as those already implemented in other ports, but compared to current practices of the port terminals, it is a simple mechanism that will allow to reduce congestion at the access and gate of the port terminals, in a more collaborative scheme compared to the current appointment system for dispatching import containers of the port terminal under study. 3. OpenGate description OpenGate is a prototype of a collaborative website platform that enables trucks to book the time slot for their arrival. In contrast to an appointment system, where the port terminal sets the schedules at which trucks must arrive, OpenGate strives for a more collaborative scheme from the perspective of truck carriers and enables the port terminal a better resource utilization.
Winter 2016 | Issue 4
voice of young generation Fig 2: OpenGate users
The gate manager aims to define gate capacity such that a better utilization of resources inside the terminal is enhanced. This may reduce truck turnaround times, congestion at the port, and may provide a standard level of service to the users. In this way, truck operators can increase their productivity and reduce pollution and emissions. In figure 3 we present a use case diagram of the general architecture of OpenGate, based on the UML technique, representing the limits of the system, as well as the features and value provided by the platform to all the main actors involved in the process.
The general idea of the VBS proposed, is that it may be a non-intrusive system to the Terminal Operator System. In this way, the VBS supports information exchange for coordinating landside operations, very similar to the idea of 1-Stop in the Australian ports. We may observe four actors (external user, gate manager, data base, opentask) that interact with the system, and start and/or receive the functionalities of OpenGate. The data base corresponds to the data available of the port terminal, and Opentask is an external decision support system that aims to support gate capacity planning decisions. These are support actors and are outside the limits of the system, allowing them to interact with the system, following the non-intrusive develop of OpenGate. The functionalities of the system bring value to the primary actors (external user and gate manager), these functions (use cases), are groups of activities/ tasks which interact with the actors and OpenGate, to provide better coordination and creating new and anticipate information, improving the operation of the port terminal. The first use case â€œCRUD Reserveâ€? allows to the external user to create, edit, delete and review their bookings, the remaining use cases are
There are three main users of OpenGate: gate managers, the system manager, and the external user represented by the truck operator or a cargo agent (Figure 2). The Gate manager defines the gate capacity, determining the number of trucks (slots) able to receive at each time zone based on the stacking windows of each vessel. The external user, represented by the truck operator, books a slot according to the time zones available in the system and the most convenient hour for its arrival. The system manager provides support and monitors the performance of the system.
FreshMINDS Fig 3: OpenGate use case diagram
handled by the gate manager, “open stacking period” allows opening a stacking period for an export process that corresponds to a vessel expected to arrive in a period. Once the stacking of a vessel is open. The uses case “manage task” allows exchange of information to coordinate the corresponding stakeholders and the corresponding tasks required for that process (e.g. reachstacker assignment).
Finally the use case “manage gate capacity” corresponds to an embedded decision support system referred to as OpenTask, that aims to support gate capacity planning decisions related to determining the maximum number of trucks to receive per time zone, aiming to improve productivity of the reachstackers at yard operations.
4. Preliminary conclusions Operations at maritime ports represent an important challenge in LAC ports. Coordination of inland container flows represents a key issue to improve the performance of the operations at the ports. Technology and information systems can support the operations at the ports and provide mechanisms to enhance better decision making. Among the different solutions, Vehicle Booking Systems (VBS) represent an alternative to deal with congestion management for landside operations. VBS have the special characteristic that seeks to enhance the operations of both trucks and port terminal operators, by reducing truck turnaround times, providing anticipated information, and balancing port resource utilization through the day. At a VBS, an adequate definition of gate capacity helps to obtain the expected benefits for all the stakeholders. A significant number of vessels with an open stacking window are handled each day by the port terminals and operations are very dynamic and uncertain. OpenGate is a prototype of a VBS for a port terminal in Chile that was developed considering as a reference the efforts and solutions implemented in Australian ports. Taking it a step further, a business model and plan for the implementation of OpenGate should be defined, in which potentially, a technological partner should provide the technological services to operate the system, in a similar fashion as 1-Stop is currently operating the VBS in Australian ports. This is very important for transparency and neutrality, rather that the own port terminal may be controlling the VBS. The role of the port logistics community in the design of the system is very important as well as the role of the port authority as regulator, guaranteeing the transparency of the system.
Winter 2016 | Issue 4
Guillermo Krebs, Pontificia Universidad Católica de Valparaíso
Giuliano, G., O’Brien T., 2008. Extended gate operations at the ports of Los Angeles and Long Beach: a preliminary assessment. Maritime Policy & Management, 35:2, 215-235. Zehendner E., Feillet, D. Benefits of a truck appointment system on the service quality of inland transport modes at a multimodal container terminal. European Journal of Operations Research, 2014, 235, 461-469. Zhao W., Goodchild A.V., 2010. The impact of truck arrival information on container terminal rehandling. Transportation Research Part E: Logistics and Transportation Review. 46(3), 327–343.
Renzo Alberti, Pontificia Universidad Católica de Valparaíso
Renzo Alberti is a research assistant at Pontificia Universidad Católica de Valparaíso, Chile; he received his (the) bachelor’s degree of Industrial Engineer at the same University in 2015. His thesis to obtain the bachelor degree was partially supported by a research project that the University performed based on funding from the Chilean Government to improve landside flows of trucks at the Port of San Antonio in Chile. He participated in (at) the international conference 5th ICCL in 2014 that was held in Valparaiso, presenting the results of his bachelor degree. His research activities at PUCV are focused on port logistics with an emphasis on landside operations and the integration of ports with the hinterlands, employing techniques such as mathematical programming and simulation.
Guillermo Krebs is currently a Master student at the Pontificia Universidad Católica de Valparaíso, in Chile; he received the bachelor degree of Industrial Engineer at the same University in 2015. His thesis to obtain the bachelor degree was partially supported by a research project that the University performed based on funding from the Chilean Government to improve landside flows of trucks of the Port of San Antonio in Chile. He participated at the international conference 5th ICCL in 2014 that was held in Valparaiso, presenting the results of his bachelor degree. His research activities at PUCV are focused on port logistics with an emphasis on landside operations and the integration of ports with the hinterlands, employing techniques such as mathematical programming and simulation.
Francisco Mejías, Pontificia Universidad Católica de Valparaíso
Francisco Mejías is currently a Master student at the Pontificia Universidad Católica de Valparaíso, in Chile; he received the bachelor degree of Industrial Engineer at the same University in 2012. Francisco has been working since he was a undergraduate student in the Research and Development area of the same institution as project engineer and research assistant in several projects developed for the port and logistics industry of the region. He worked in the development of the prototype OpenGate for the ports of San Antonio and Arica. He was also project engineer of an innovation project related to the development of a market place to enhance the development of SMEs as suppliers of the port industry. His research area is related to port logistics.
Shipping Economics Research: There is More to Share Between Academia and Industry
Konstantinos G. Gkonis
Winter 2016 | Issue 4
skeptic & heterodox
Two parallel streams Someone who has worked on both the ‘practice’ and ‘academic’ side of shipping economics (ShipEcon) research may have encountered certain difficulties in bridging the expected requirements respectively. Practitioners are often reluctant to read academic analyses, and academics are not easily receptive of research not making reference to scientific papers, but rather to industry experience and practice. A result is that the exchange of knowledge between the two sides is hindered and our understanding, for example, of how shipping markets evolve might take longer to progress. A demanding audience for Shipping Economics research Theoretic papers that are received very positively by academic readers, and which moreover treat topics of interest to practitioners are often not ‘speaking’ to this latter audience. For one reason, their scientific rigour that gives them merit on one hand do not make them any more appealing to this second audience, as they speak a different ‘language’ beyond practitioners’ usual working universe, in both reasoning and ‘accessible understanding’ dimensions. Some might also be dismissive in view of the occasional theoretic treatment of certain commercial aspects of a subject, which is not surprising given the academics’ natural or occasional distance from business practice. But this is a minor problem.
Many practitioners would find it difficult to grasp theoretical papers’ content and conclusions of relevant to them applicability. Company research departments (that only larger organisations can afford) have in most cases as priority and focus fundamentals-based, easy to grasp, short-term horizon reporting and studies. Note this interesting point, which will be commented afterwards: such ‘practical research’ approaches are often descriptive or using basic methodologies lacking modelling, explanatory, and predictive power. Times have evolved to attract to the industry a younger generation of shipping executives with strong academic background. But at the same time, one will see young professionals / future shipping principles hired on the basis of e.g. linguistic abilities rather than quantitative and maths background. The concern expressed here is not about how ShipEcon research might evolve in a future time, but how it is received at present time; it is not about its impact on a niche group able to understand it, but on the wider possible audience that should be concerned by its findings. Great potential for Shipping Economics research in the industry Let us consider an example. Shipping investments is an area that often requires increased patience by decisionmakers, which could be moderated by somehow increasing the responsiveness of the ‘vessel ordering mechanism’. Although not to be further developed here, this could be an example for the need and importance of better, timely and widely available (so that it becomes ‘common knowledge’) intelligence. It is a context that could justify private exclusive research findings for opportunity identification and value creation (e.g. for first-movers), that should then be made widely available (and understood!) to avoid value destruction (e.g. by over-ordering vessels
The purpose of the present article is to discuss inefficiencies in shipping economics research, when meeting practical/business and academic rigour goals orient it towards different directions, making approaches from the two sides sharing less than they should.
CHALLENGE in a certain shipping segment). Demonstrating with scientific rigor how a shipping market evolves is good, but explaining such a process and its consequences to a wider audience of industry decision-makers can be even more purposeful. Indeed, in the absence of modelling analysis and justification, decision-makers resort in practice largely to personal judgement, experience and gut feel, with varied degrees of success.
The second point here is that there are many reasons why research findings channelled to a wide audience of practitioners / decision-makers have great value. There is motivation reasoning for industry players to fund exclusive and sophisticated (‘academic standards’ research), whose findings should be easily absorbed, for private profit-making purposes, research that should then be made publicly available and easily understood by the industry to ensure market efficiency. Multiple goals would be met: profit for industry players; market efficiency; wider industry understanding of market dynamics (useful to both experienced stakeholders in the shipping industry and new or occasional entrants, such as private equity investors); ShipEcon research progress and dissemination.
There is an opportunity for the academic community to take initiatives for further approaching the industry, before waiting for the other way round (of course this is a big topic and area of discussion of its own). To this direction academics should follow more closely market developments and practitioners’ concerns and be more exposed to market coverage and industry conferences as sources of information and inspiration for new research. In order to facilitate this (twoway ideally) dialogue, why not, as a starting point, append to academic papers, also as a requirement from ShipEcon journals (just as for an abstract), a onepage max length executive summary ‘speaking’ to this industry audience in a simple language, along with
practical conclusions and insights. Hopefully this could trigger increased interest from the other side. Consider the ‘prêt-à-porter’ Shipping Economics dimension Academic papers full of merit may not be appealing to industry practitioners. They are good to build a profile and gain respect in academia, but how much are they really read by practitioners / decisionmakers? Do we want rather disconnected worlds in academic and industry ShipEcon research or (more) communicating ones? The second option makes much more sense given the applied and traditional nature of our industry. Of course building in academia today the industry research of the future deserves its space, just like race-car engineering finds industrywide applications. In clothes’ fashion, there is the ‘haute couture’ appreciated by few and accessible by even fewer, and the ‘prêt-à-porter’ that fits daily use purposes of a wider public. This discussion about enhanced exchanges between academic and industry ShipEcon research should motivate the creation of an adapted mindset and vision in academic environments, in order to prepare a new generation of professionals and researchers. The Maritime Economist magazine clearly has among its objectives bringing academic and practical (industry) research closer, through its well-thought sections dedicated exactly to these purposes, and I take this opportunity to wish its team the very best in succeeding its goals. End-note: Opinions in this article are solely personal; as author of this article I am not representing BRS.
Winter 2016 | Issue 4
skeptic & heterodox
Konstantinos G. Gkonis
Konstantinos G. Gkonis holds a PhD in Maritime Transport from the National Technical University of Athens - NTUA (Laboratory for Maritime Transport, School of Naval Architecture & Marine Engineering), an M.Sc. in International Business (Manchester School of Management, UMIST) and a M.Eng. in Mechanical Engineering with specialisation in energy (NTUA). He has 15 years of experience in industry and academia in the area of energy shipping, and has been since 2011 in charge of Tankers & LNG shipping assets research with BRS shipbrokers in Paris. Contact email : KG@Gkonis.eu
Memories Memories of the Halifax 1999 Conference Mary R. Brooks
The theme for the Halifax conference, held 13 and 14 September 1999, was Liner shipping: What’s next? The program was designed to fit with Halifax Port Days and all the attendees at the IAME conference were able to attend the half-day business session of Port Days and the IAME conference itself opened after the Port Days lunch on 13 September. The IAME conference ran for the afternoon (at the World Trade and Convention Centre) and the following day at the Citadel Hotel. It was very well attended given how far most members had to travel to attend.
The opening plenary speaker was Commissioner Delmond Won of the U.S. Federal Maritime Commission; he had come up from Washington to inform the audience of what was happening under theOcean Shipping Reform Act of 1998 and to provide the American regulatory perspective on liner shipping competition and its regulation. Critical changes were to the confidential contracting and tariff filing requirements, and the ‘deregulation’ of liner shipping and its anti-trust immunity were really a form of ‘new’ regulation.
The conference focus on liner shipping meant that the plenary session later that afternoon explored liner shipping regulation and competition across a number of countries. N. Shashikumar started the liner session by speaking about the Ocean Shipping Reform Act of 1998, presenting an analysis of its anticipated impact on U.S. carriers, shippers and third parties. He was followed by Russell T. Weil, a DC attorney, who had a U.S./Europe legal comparison perspective on the act and whether it would open up competition, given its focus on open conferences and confidential contracting. The next presentation featured Joseph Monteiro and Gerald Robertson from the Competition Bureau of Industry Canada; they spoke on emerging developments in the Canadian situation, sandwiched as the country was between U.S. and European interests in North Atlantic liner trade. Up last was a team of three from Cardiff speaking on deregulation and whether or not concentration in liner shipping would result. A number of Port Days attendees stayed on to hear these presentations, rather than take the harbor tour on offer by the port.
Winter 2016 | Issue 4
the story of IAME
That evening IAME conference participants were able to attend the Port Days banquet and entertainment, or have a free evening at local Halifax restaurants if they wished.
European experiences with North American experiences on both of these topics. Finally the afternoon concluded with two concurrent sessions on port financing and on regional port issues.
Speakers in the first session of day 2, chaired by Trevor Heaver, focused on industry perspectives on liner networks and cooperation. Topics ranged from capacity pools to strategic alliances (motivations and benefits), and from issues of externalities to questions about instabilities in the liner shipping market. Again, speakers were from Europe and the U.S. and a variety of perspectives made clear that there was no consensus on what the future would hold.
Probably what most people remember about Halifax conference was the awards dinner that evening held at a local restaurant with a spectacular view of the harbor; the ‘parade of lobster’ charged everyone’s palates, plenty of wine was had, and the laughter made for a memorable closing for the conference.
The luncheon speaker was Frank Helliwell, deputy chairman of CP Ships, who came from the UK to join us for the day; he described in significant detail the strategic thinking behind CP Ships’ growth plans to gain market dominance in the North Atlantic by acquisition. The audience was spell-bound; not even a fork was dropped! After lunch, we had two concurrent sessions on the impact of liner shipping on ports and on labor issues in shipping; again we had the benefit of comparing
Mary R. Brooks, Professor Emerita Rowe School of Business Dalhousie University PO BOX 15000 Halifax, NS, B3H 4R2 Canada e-mail: firstname.lastname@example.org
The remaining conference sessions were held concurrently. Four papers on ship size and technology were presented in one room chair by Wayne Talley, while port selection was discussed in a second room chair, chaired by Eddy van de Voorde. The papers presented represented a solid cross-section of IAME member research at the time.
In all, there were two incredible speakers and 28 papers presented, 11 of them selected for the conference Proceedings. The winner of the “who came from furthest away” contest was Helen Bendall, all the way from Sydney Australia (a full 11 time zones!), a point fiercely contested by the contingent from Hong Kong, but they being north of the equator found themselves in a close second place. The best paper prize was awarded to Kevin Cullinane, M. Khanna and Dong-Wook Song’s paper “How Big is Beautiful: Economies of Scale and the Optimal Size of Containership.”
Memories IAME Newsletter, July 1996 (Courtesy of Alexander M. Goulielmos)
Winter 2016 | Issue 4
the story of IAME
IAME 1996 Conference Vancouver
Winter 2016 | Issue 4
Winter 2016 | Issue 4
IMSF meeting at IAME 1996
Winter 2016 | Issue 4
HSBA Handbook on Ship Finance
The HSBA Handbook on Ship Finance edited by Orestis Schinas, Carsten Grau and Max Johns, is a comprehensive collection covering all the important aspects of ship finance. The impressive authorship (38 authors) and the number of contributions (20 chapters) are indicative of the breath and the widescope of the work. This collection is written with academic rigour to the benefit of practitioners, the shipping community and the academia with particular attention to the most recent developments in the field. The book is aimed at those readers who are already familiar with finance fundamentals and are looking for advance but yet understandable discussions on the recent developments in the finance sector.
The book is structured in six parts. The first part discusses the fundamentals of ship finance, with particular attention to market fundamentals and shipping loans. The second part is dedicated to equity financing. A book edited by eminent Germany-based scholars had to deal in detail with the German KG scheme that is the subject of two chapters, although different in terms of focus as one deals with the KG scheme over the years while the other more in detail with the Alternative Investment Fund Management Directive (AIFMD). The analysis is complemented with a discussion on the Norwegian KG scheme and two detailed cases that illustrate equity finance from an international perspective.
Winter 2016 | Issue 4
Section five is dedicated to risk management in the broader sense, dealing with companies in distress and alternative ways to manage and finance tonnage and is particularly interesting considering the difficult climate for owners and financiers in the aftermath of the 2008 financial and economic crisis. The topics presented in this section are most diverse ranging from leasing, shipping pools, restructuring, analysed in the case of CSAV, risk management in the container sector and Islamic finance. This section offers a variety of examples and practical insights on the issues presented. The two contributions in the sixth section focus on two topics that have become increasingly important in the area of ship management and finance: investor relations in effective corporate communications and the role of the new-building broker.
This volume will be very valuable for students, professional or academics with an interest in the recent development in shipping finance or those aiming at analysing more in depth some of the fascinating aspects of ship finance. The structure of the language of the book are easily accessible even for those with limited familiarity with ship finance issues, although knowledge of the foundations of ship finance is necessary to fully appreciate the new concepts and ideas presented. One of the main advantages of the book is being able to convey, often in an intuitive yet rigorous manner, the experience of many of the authors on the field and to highlight the current issues on shipping finance. An excellent handbook to peruse or read in detail for anybody with an interest in the current developments in the fascinating world of ship finance. HSBA Handbook on Ship Finance Edited by O. Schinas, C. Grau and M. Johns Published by Springer, Heidelberg: 2015. ISBN: 978-3-662-43409-3
The two contributions in the third section are dedicated to the important topic of asset pricing, where the Long Term Asset Value (LTAV) evaluation standard and the Qualitative Adjusted and Audited Algebraic Estimation on the basis of Last Done (QAAELD) are explained and discussed. The fourth part deals with the institutional frameworks used for ship finance focusing on Greece, with its long tradition of ship finance and Turkey that has attempted in more recent times to develop favourable conditions for maritime investment. The section concludes with a discussion on the OECD Model convention.
Maritime Logistics Value in Knowledge Management
The study Maritime Logistics Value in Knowledge Management by Eon-Seong Lee and by dongWook Song and published in the Routledge studies in transport analysis is a study dedicated to the role of knowledge management strategy in improving maritime logistics value. The book is one of the first attempts to systematically review the role of knowledge management in maritime supply chains and build on the foundations of maritime logistics and knowledge management theory to the benefit of practitioners and scholars.
After a brief summary of the theoretical foundations of global logistics, maritime logistics and strategic management theory the book analyses through an extensive exploratory case study of the Korean maritime industry and Delphi methods to expand on the theoretical framework developed at the beginning of the book. The study supports the observation that cooperation and competition among maritime operators positively associates with knowledge acquisition and the development of maritime logistics value. High coopetition enables maritime firms to maximise the informational benefit in the network. The deriving enhanced knowledge acquisition and organisational performance is in turn increases value creation.
book would be valuable for readers all over the world with an interest in the yet rather limited application of management theory to shipping. The language of the book is concise and clear and the authors build step by step on management and maritime logistics concepts that should be accessible also for those readers with limited familiarity with management theories. Some of the conclusions presented, however, have the potential of laying the foundations of a new research area. Certainly a â€˜must readâ€™ for those interested in management and shipping.
The study is written clearly and shows a thorough understanding of the applications of management theory to the maritime sector. Although based mostly on Korean examples, the discussions presented in the
Maritime Logistics value in Knowledge Management By E.-S. Lee and D.-W. Song, Published by Routledge, London: 2015. ISBN: 978-1-138-77544-2
Winter 2016 | Issue 4
IAME 2015 conference
2016 Annual Conference International Association of Maritime Economists (IAME) 23rd -26th of August 2016 Hamburg, Germany
Call for Papers No abstract submission Submission Deadline Full Papers: 21 February 2016
The Event IAME 2016 will be held in Hamburg on the 23rd-26th of August 2016. The conference, for the first time in Germany, will be co-organised by the Hamburg School of Business Administration (HSBA) and the Kühne Logistics University (KLU) with the support of the University of Hamburg (UHH), the Technical University of Hamburg (TUHH), and the Fraunhofer Center for Maritime Logistics and Services (CML). All institutions involved are united by the desire to show the beauty of Hamburg to the world and contribute to the reputation of the metropolis on the Elbe as a leading centre for research in maritime economics and management. Conference Theme
The role of Hamburg in ship finance and the position of the city as one of the world ship-owning capitals is well established. The Hamburg ship-owning community is an important contributor to innovation in the sector and to the wealth of the city. In addition the Hamburg 52 port is in the forefront in the areas of efficiency and sustainability. Given the importance of such topics for
the years to come, the conference theme has been selected as: The maritime transport of the future: the role of innovation uptake, sustainability and availability of shipping finance. Contributions are invited in the areas including but not limited to: • Port and terminal finance • Strategic port developments • Security in shipping and ports • Short sea shipping • Environmental issues in the maritime sector • Marketing and revenue management in shipping • Risk management in shipping • Strategic and operational issues in shipping • International shipping policies and regulations • Operation research methods for shipping and terminals • Port competition and cooperation • Flag and crew management • Multi-modal transportation
Winter 2016 | Issue 4
IAME 2015 conference
Submission Procedures In January a link will be available on the IAME website for submissions of full papers. There is no preliminary abstract submission. Papers submitted by the 21st of February will go through the full review process and will be eligible for publication in selected journals. These papers will be included, pending positive review, in the conference proceedings (USB) and the authors of selected papers will be give the opportunity to have their work published in the hard copy selected proceedings or selected journals depending on the results of the review process.
Papers will be returned to authors on the 24th of April, and authors will have to resubmit the final version of their work by the 22nd of May. For the first time in IAME 2016, authors have the possibility to submit papers not for review or to submit extended abstracts and posters (limited to one submission per registered author). The deadline for submission of extended abstracts, posters and papers not for review is the 12th of June. These contributions will be included in the programme in specific sessions, but will not be part of the official proceedings and will not be eligible to be selected for the journal special issues. Authors will be notified of final acceptance of their contributions by the 19th of June 2016.
Key-Dates Paper submission Journal special issue(s) IAME selected proceedings, IAME USB proceedings Paper reviews back to the authors Submission of revised papers Extended abstracts for presentation only, poster sessions and papers with no review process In the programme, but not in the proceedings Notification of paper acceptance Conference delegates meet in Hamburg, Germany
Further Information Further information can be obtained from the conference website:
21st of February 2016 24th of April 2016 22nd of May 2016 12th of June 2016 19th of June 2016 23rd-26th of August 2016
Winter 2016 | Issue 4
Contribute to The Maritime Economist
ME Mag has five fundamental functions: 1. Encouraging scholars to present their research in plain language for wider audiences of the maritime industry; 2. Promoting and encouraging R&D partnerships with non-academic institutions (firms, governmental offices, among others) of the maritime industry; 3. Encouraging young scholars to conduct research in maritime topics; 4. Encouraging provocative and critical research; 5. Support collaboration among academia and professionals.
Authors should keep in mind that, ME Mag is NOT only published for scholars, but it is also circulated to large society of the maritime industry and policy makers. Readers of ME Mag may not have a background on the presented topic, and authors are responsible for presenting the content of their article in a language that is clear to business and policy makers. ME Mag does not publish articles with many mathematical functions, long theoretical discussions and/or lack of practical value. Authors should always consider the perspective of professionals, business practitioners and policy makers and any other people who have general knowledge of maritime while have limited knowledge on the intended specific topic. ME Mag encourages narrative style, story-telling, metaphorical expressions and other methods of non-fiction authorship. On the other hand, each article should ensure at least one of the following dimensions: • Presenting a new topic, method, theory, perspective or model; • Presenting an existing academic research (already published in a scholarly-refereed journal); • Analyzing data, models, systems or a market with novel interpretations; • Criticizing an existing approach, system or thought; • Challenging the conventional wisdom on a particular topic of maritime; • Presenting a knowledge created in the business/ industry practice; • Introducing an innovative solution to a common problem; • Presenting a policy or strategy; • Sharing information about available data and tools of interest to maritime professionals. Four major sections are established to perform some of functions of ME Mag, and each has its own concept. Authors should first review the concept of sections below and define which section fits for their (proposed) article.
The Maritime Economist (henceforth ME Mag) is a magazine edited by the International Association of Maritime Economists. The aim of ME Mag is to combine both theoretical and practical knowledge and promote collaborations among scholars and professionals in the maritime industry. ME Mag is interested in the following topics with maritime focus: • Economics of maritime transportation (theory, models, practical controversies, etc.); • Port governance, port competition, port utilization and other port related issues; • Finance, asset management and investments; • Management and leadership in the shipping business; • Operations research, optimization and industrial engineering for maritime problems; • Maritime policy and governance; • Maritime business strategy; • Maritime geography and spatial analysis; • Behavioral science and human factor; • Marketing; • Cruise and ferry industries; • Short sea shipping; • Environmental issues and sustainability; • Risk management; • Intermodal transport; • Other related topics. ME Mag has a particular focus on Maritime Economics and Business while covering many related fields.
Submission Quidelines Note: Authors who are not sure about the selection of proper section may send an e-mail to either a section editor which is thought to be closer to the topic and purpose of article or Editor-in-Chief for consultation. Section Specific Notes Section 1: INPLAIN
InPlain section is dedicated to academic research performed by both scholars and professionals in the maritime economics and business research. Scholars can briefly present a research which will be published shortly in an academic journal or an already published one. In such case, author should refrain using same text and should rewrite in ME Mag’s concept of easyto-read and concise style. Therefore, it should be a kind of executive summary of the upcoming/published academic paper.
Section 2: PROFESSION & PRACTICE
Profession and Practice section is dedicated to industry professionals for presenting innovative solutions, created knowledge and R&D results in the practice. Authors should refrain from telling success stories and focus on the drivers and requirements for successful results. This section promotes research activities at non-academic institutions and encourages to present research achievements as well as core concepts and created knowledge. Authors should present some evidences for supporting arguments. Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions.
Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions. Technical requirements on articles for submitting to this section are as follows: • Article should not exceed 2000 words plus a number of figures or tables; • A bionote of 80 to maximum 100 words length should be inserted at the end of the article. Each article submitted to InPlain will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by the section editors.
Technical requirements on articles for submitting to this section are as follows: • Article should not exceed 2000 words plus a number of figures or tables; • A bionote of 80 to maximum 100 words length should be inserted at the end of the article; • Author’s affiliation (e.g. name of company) will normally be indicated in bionote. However, using brand names and/or company logo in the article may cause an advertisement conflict. In such case, author will be contacted about using these components by sales office if the article is accepted for publication. Each article submitted to Profession & Practice will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors.
A proposal for consideration can be sent to editors instead of full article. Proposals should address briefly the objective, motivation and background, main idea and major results.
A proposal for consideration can be sent to editors instead of full article. Proposals should address briefly the objective, motivation and background, main idea and major results.
Please submit your full article or a proposal electronically to email@example.com
Please submit your full article or a proposal electronically to firstname.lastname@example.org
Winter 2016 | Issue 4
FreshMINDS section is dedicated to young scholars and professionals (early in their [research] career) for presenting their research results, novel concepts and innovative findings or thoughts. This section promotes young scholars and professionals to express their opinions and/or criticism about the conventional concepts with proper theoretical and/or practical evidences to support their arguments. Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions. Technical requirements on articles for submitting to this section are as follows: • Article should not exceed 2000 words plus a number of figures or tables; • A bionote of 80 to maximum 100 words length should be inserted at the end of the article; Each article submitted to FreshMINDS will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors. A proposal for consideration can be sent to editors instead of full article. Proposals should address briefly the objective, motivation and background, main idea and major results. Please submit your full article or a proposal electronically to email@example.com Section 4: CHALLENGE
CHALLENGE section is dedicated to draw attention to critical problems in the maritime industry as well as academic research. Both scholars and professionals can submit a short article dealing with the problem and draw attention of readers to that challenging topic. Articles in this section should be written in plain
language excluding jargons and using limited number of technical terms with brief and simple descriptions. Technical requirements on articles for submitting to this section are as follows: • Article should not exceed 1000 words plus a number of figures or tables; • A bionote of 80 to maximum 100 words length should be inserted at the end of the article; Each article submitted to CHALLENGE will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors. A proposal for consideration can be sent to editors instead of full article. Proposals should address briefly the objective, motivation and background, main idea and major results. Please submit your full article or a proposal electronically to firstname.lastname@example.org BOOK REVIEWS
ME Mag will review recently published books and article collections related broadly to maritime transport, maritime economics, ports, logistics and shipping that can appeal not only to an academic audience but also to industry. If you would like a book to be considered for review in the magazine, please send two copies to: Michele Acciaro, Grosser Grassbrook 17, 20459 Hamburg, Germany. For further information, please do not hesitate to write to email@example.com
Section 3: FRESHMINDS
ME MAG Your Intellectual guide for maritime knowledge
FEEDBACK ME What do you like with ME? How can we improve it? Any Suggestions... Write us! firstname.lastname@example.org
International Association of Maritime Economists The Leading Society of Maritime Economics