Maritime Logistics

Subject: Logistics Management

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 Presentation Flow
1. Introduction
2. Overview of the role of sea trade in economic
development
3. Basic information on the merchant fleet
4. Ship types
5. Ports
6. International maritime-and-related organizations

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 Definition
• Maritime Logistics Management is the part of
the supply chain process that plans,
implements, and controls the efficient,
effective flow and storage of goods, services,
and related information from the point of
origin to the point of consumption in order to
meet customers’ requirements in the
Maritime and business environments

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 History
• Egyptians used it in 3200 BC
• Maritime transport was dependent on wind
• Mechanized ships started in mid 19th century(steam
engine)
• Diesel engine introduced in 20th century
• Today 90-95% of of international trade is carried
onboard ships of some sort
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 Characteristics
• Cheap Conveyance
• High carrying capacity
• Longer transport time
• Affected by weather factors
• Delays on port where loading and unloading is
done

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 Operation

• Liner Shipping

• Tramp Shipping

• Industry Shipping

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 Sector Specific Targets

• Job creation

• Social development

• Increasing maritime
awareness

• Labor standards

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 Main Concerns of Maritime Industry

• Maritime business is to be conducted according to

the changing pattern in international trade and
global logistics and supply chain
• The rule of games is changed –larger and fewer
players hold the ever-stronger market power
• New strategies are to continuously develop and
implement to be competitive and sustainable
• Successful integration into the global supply chain is
the key to their business

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Effect of Global Slowdown

2008:
• Global Economic
Downturn continues
• Sharp decline in world
merchandise trade
• Growth in international
seaborne trade slowed
down to 3.6 % (2008) from
4.5 % (2007)
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Growth in the volume a of merchandise trade, by
geographical region, 2006–2008 (%ages)

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Source: WTO Press Release: World Trade 2008, Prospects for 2009
Indices for world economic growth (GDP), OECD Industrial
Production Index
and world seaborne trade (volume), 1994–2009

(1994 = 100)

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Indices for world economic growth (GDP), OECD Industrial
Production Index
and world seaborne trade (volume), 1994–2009
Source: UNCTAD Review of maritime transport 2009

(1994 = 100)

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 Sea Borne Trade

• 2008 international seaborne trade at 8.17 billion

tons of goods loaded,
• With dry cargo continuing to account for the
largest share (66.3 per cent)
• Major loading areas were located in
1. Developing regions (60.6 per cent)
2. Developed economies (33.6 per cent)
3. Countries with transition economies ( 5.9 per cent)

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

33.6

5.9

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60.6
World seaborne trade, by country group and region,
2008
(percentage share in tonnage)

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Source: UNCTAD Review of Maritime Transport, 2009
Lloyd MIU Study

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 Maritime Transportation Planning Problem

• Low visibility

• Less structured

• Much More Uncertainty

• Traditional & Fragmented

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 Strategic Problems
Among the strategic problems:
• Market and trade selection,
• Ship design,
• Network and transportation system design (including
the determination of transhipment points for
intermodal services),
• Fleet size and mix decisions (type, size, and number
of vessels), and
• Port/terminal location, size, and design

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 Tactical Problems
The tactical problems include:
• Adjustments to fleet size and mix,
• Fleet deployment (assignment of specific vessels to
trade routes),
• Ship routing and scheduling,
• Inventory ship routing,
• Berth scheduling,
• Crane scheduling,
• Container yard management,
• Container stowage planning,
• Ship management, and
• Distribution of empty containers
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 Operational Problems
The operational problems involve:
• Cruising speed selection,

• Ship loading, and

• Environmental routing

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 Maritime supply chain applications
A tactical transshipment problem, where coal is transported at sea from several
supply sources to a port with inventory constraints. The coal is then transported
from the port to several coal fired power plants.
• Objective is to minimize:
– Procurement costs,
– Transportation costs, and
– Holding costs.
• Constraints:
– Company procurement policy,
– Power plant demand,
– Port unloading capacity,
– Blending requirements, and
– Safety stocks.
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Basic information on the merchant fleet
General cargo vessels
Container ships
Dry bulk carriers
Liquid bulk carriers
Gas tankers
Ship types
Liners
Tramps
Cruising ships
Special vessels
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 General Cargo Vessels
"cargo" refers to the goods carried aboard the
ship for hire

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

that carries cargo, goods, and materials from one port
to another.

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 Container ships
Cargo ships that carry all of their load in truck-size intermodal
containers, in a technique called containerization
Common means of commercial intermodal freight transport

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 Dry Bulk Carriers
The term “Dry bulk carrier" is used to distinguish bulkers from
bulk liquid carriers such as oil, chemical, or liquefied petroleum
gas carriers

Specially designed to transport unpackaged bulk cargo, such as

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

Bulkers make up 40% of the

world's merchant fleets

Range from single-hold mini-
bulkers to mammoth ore ships
able to carry 365,000 metric tons
of deadweight (DWT)
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 Dry Bulk Carriers
Typical bulk carrier crew
Captain/Master
Deck Engine Steward's
department department department
1 -Chief Officer 1 -Chief Engineer 1-Chief Steward
1 -2nd Officer 1 -1st Asst. Engr. 1-Chief Cook
1 -3rd Officer 1 -2nd Asst. Engr 1-Stwd's Asst
1 -Boatswain 1 – 2-3rd Asst. Engr.
2 – 6-Able Seamen 0 – 2-Jr. Engr.
0 – 2-Ord. Seamen 1 – 3- Oiler
0 – 3-Greaser/s
1 – 3-Entry-level

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 Liquid Bulk Carriers
"wet" trades of
• Petroleum
• Liquefied natural gas (LNG)
• Gasoline
• Chemicals
• Liquid edibles (vegetable oil, cooking oil, fruit juices, etc.)

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 Gas Tankers
An LNG carrier is a tank ship designed for transporting
liquefied natural gas (LNG)

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 Liners
Ocean liner is a ship designed to transport people from one
seaport to another along regular long-distance maritime
routes according to a schedule.
Liners may also carry cargo or mail, and may sometimes be
used for other purposes (e.g., for pleasure cruises or as
troopships).

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 Tramps
•A ship engaged in the tramp trade is one which does not
have a fixed schedule or published ports of call.
•As opposed to freight liners, tramp ships trade on the spot
market with no fixed schedule or itinerary/ports-of-call(s).

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 Cruising Ship
•A cruise ship or cruise liner is a passenger ship used for
pleasure voyages
•Major part of the tourism industry, accounting for U.S.$27
billion annually

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 Special Vessels

Cable Ship

Fishery
Protection
Vessel

Drill Ship

Heavy Lift
Ship

Icebreaker Ship
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 Cargo Loading Problem
Containers
A B C
Volume capacity 50 250 500
(cubic feet)

Weight 400 1000 2500

Capacity(Kg)

Contribution 500 2000 4500

(Rs.)

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 Cargo Loading Problem(contd.)
Objective : To determine number of cargo units of each type so as to Max. total
contribution subject to capacity restriction for carrier

Constraints:
Cargo capacity of ship constrained both by Max. Volume of 50,000 cubic feet
& Max. Weight of 2,50,000 Kg

How to solve?
Sol: Formulate as LPP
(OR Application)

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 Port
 A facility for receiving ships and/or transferring cargo

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

 Cargo-handling equipments, processing facilities,

custom facilities

 Port types – cruise, cargo ,

fishing, etc.

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 Port and Economic Development
Global trade structure or the transport industry

Industrial relocation and boom in world production -

increased the tonnage supply and maximising cargo unitisation

From labour intensive to capital intensive businesses

Integrated and continuous transport chain – from producer

to consumer

Production required raw material from one country,

warehousing in another and exports to a third one

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Port Infrastructure Efficiency Measures

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 Major Ports
 In world - Singapore, Shanghai, Rotterdam (Netherlands),
Kobe(Japan), Hong Kong (Total cargo tonnage)

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

ports - as per administrative significance

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

Jawaharlal Nehru Port, Haldia , Marmugao, Mumbai, New
Mangalore, Paradip, Tuticorin and Mundra

Singapore port(40)

Jawaharlal Nehru Trust Port, Navi Mumbai (9)

 Major Ports in the world
Rank Port Country 2008 2007 2006 2005 2004
1 Singapore Singapore 29,918 27,932 24,792 23,192 21,329
2 Shanghai People's Republic of China 27,980 26,150 21,710 18,084 14,557
3 Hong Kong Hong Kong 24,248 23,881 23,539 22,427 21,984
4 Shenzhen People's Republic of China 21,414 21,099 18,469 16,197 13,615
5 Busan South Korea 13,425 13,270 12,039 11,843 11,430
6 Dubai United Arab Emirates 11,827 10,653 8,923 7,619 6,429
7 Ningbo People's Republic of China 11,226 9,349 7,068 5,208 4,006
8 Guangzhou People's Republic of China 11,001 9,200 6,600 4,685 3,308
9 Rotterdam Netherlands 10,784 10,791 9,655 9,287 8,281
10 Qingdao People's Republic of China 10,320 9,462 7,702 6,307 5,140

(in ‘000 TEUs )

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Major Ports in the world
 Major Ports in India
Cargo Handled (06-07)
Name % Increase (over 05-06)
'000 tonnes
Kolkata(Kolkata Dock System &
55,050 3.59%
Haldia Dock Complex)
Paradip 38,517 16.33%
Visakhapatnam 56,386 1.05%
Chennai 53,798 13.05%
Tuticorin 18,001 05.03%
Cochin 45,314 20.28%
New Mangalore Port 32,042 -06.99%
Mormugao 34,241 08.06%
Mumbai 52,364 18.50%
J.N.P.T. 44,818 18.45%
Ennore 10,714 16.86%
Kandla 52,982 15.41%
All Indian Ports 463,843 9.51%

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 Containerization
A system of intermodal freight transport using standard
intermodal containers

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

 Approximately 90% of non-bulk cargo worldwide

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

53 ft
Issues
Increased Efficiency
Additional Fuel Cost
Misuse – Smuggle
Empty containers
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 Issues in Port Logistics
Cannot be built overnight and may take a lifetime to repay

Poor connectivity to international transport networks

Tended to absorb excess capacity in low-skilled labour

Managing ports superstructure becoming more

sophisticated and demanding

Governments facing resistance for developing ports.

Upgrading infrastructure according to modern technology

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 Snapshot
Capabilities Market Tradeoffs
•Huge, heavy loads •Used in U.S. Great Lakes, •Limited accessibility,
hauled for distances rivers; EU rivers; China other transport required
and SE Asia and to/from port
•Low-value, high-density elsewhere
•Slow travel (trains faster
cargo such as coal or
but higher cost)
grain •Waterways maintained
by taxpayers •Harmful to
•Very low per-mile cost environment
and fuel-efficient •Low fixed costs for ease
of entry, private fleets

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

 Came into force ten years later, meeting for

the first time in 1959

 The IMCO name was changed to IMO in 1982

 Presently Headquartered in London, it’s a

specialized agency of the United Nation with
168 Member States and three Associate
Members

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Organizational Structure
1.Governing Bodies
2.Secretary General
3.Technical Committees
3.1 The Marine Environment Protection Committee
3.2 The Legal Committee
3.3 The Technical Cooperation Committee
3.4 The facilitation Committee
4. The Maritime Safety Committee

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Main Objectives

• To Ensure Safe secure and efficient shipping

on clean Ocean
• To develop and maintain a comprehensive
regulatory framework for shipping
• It includes safety, environmental concerns,
legal matters, technical co-operation,
maritime security and the efficiency of
shipping. 59
 Legal Instruments
Source of approximately 60 legal instruments like

a) International Convention for The safety of Life at

Sea(SOLAS).
b) International Regulations for Preventing Collisions at
Sea (COLREG)
c) Port State Control (PSC) authority, allowing domestic
maritime authorities such as coast guards to inspect
foreign-flag ships calling at ports of the many port
states

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

• International Ship and Port Facility Security (ISPS) Code

• International Code of Signals

• Intercessional Meeting of IMO’s Working Group on

Greenhouse Gas Emissions from Ships

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 THE SHIPPING TRADE PRACTICES BILL, 2008
Objectives
• Bring transparency in trade practices adopted by maritime
transport logistics service providers
• Arranging transportation of containerized cargo
• Registration of such service providers and their obligations;
• mode and manner of fixing tariff by the service providers;
• EXIM (Export Import) and for matters connected therewith
or incidental thereto

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Application of Act
• Extends to the whole of India except the State of
Jammu and Kashmir

• Service providers in relation to carriage or

transportation by ‘Sea’

• Service providers for warehousing

• Providing services relating to stuffing and destuffing

of containers

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Registration

• No person shall carry on or commence the business

of maritime transportation logistics service unless
he is registered under this Act.
• The application shall accompany
• Prescribed fee
• Bank guarantee of not less than 10 lakh
rupees
• Insurance from an underwriter for third party
liability cover.

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

• Application for registration considered only if place of

business is registered in India

• The registration certificate shall be non transferable.

• Service provider to publish the tariff for the services

• The registration is subject to production of the bank

guarantee and the insurance cover every year

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 References
• UNCTAD Review of Maritime Transport, 2009
• Lloyd's MIU Study at the IMSF conference in New
Orleans in May 2009
• http://ipa.nic.in/ - Indian Ports Association
• http://www.iilschennai.com/ - Indian Institute of
Logistics, chennai

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Thank You…!!

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