The Future of Maritime trade in 2020 and the implications for the port of Amsterdam

Team Members:

1. Maria Marcos
2. Mirjam Terhorst
3. Andreas Schuil
4. Eduard de Visser
5. David Verberne

Driving forces:

1. Piracy
   
2. Containization
   
3. Maritime transportation security
   
4. Consumer’s responsibility CO2 footprint
   
5. Consumer/customer demands regarding speed of service/delivery
   
6. Improvement through inventions
   
7. Technical Innovation in the supply chain
   
8. International Trade of goods
   
9. The cost of freight shipping
   
10. Building ‘green’
    
11. Increase Climate change
    
12. Increase in Marine Pollution
    
13. Imbalance of Supply and Demand
    

Existing driving forces

1. Influence of the World Trade Organization (WTO)
   
2. Increasing use of E-commerce
   

Research Questions:

• 1. How have shipping rates developed as per the recession?

[[The timing of the current recession could not be worse for the shipping industry. Booming market conditions in recent years led to an ordering boom, being delivered as of 2009. At the same time, demand for shipping services plummeted. As a result, shipping rates dropped strongly, particularly for large bulk carriers and container vessels.

Volatility in shipping rates is in our view high at dry cargo (Capesize up to handy-size bulk carriers), containers, and offshore. Rate fluctuations are more moderate at the transportation of liquids (crude oil, products, chemicals, LPG) and at multi-purpose (except for the last few months), and low at specialized reefers.

Compared with the volatile shipping rates, the new build price of vessels is relatively stable despite of the booming order intake in recent years. The fluctuations of the steel price seems to have a larger impact.]]

• 2. What’s the difference between deep sea and short-sea shipping?

Whereas deep sea transportation is done from port-to-port, short-sea shipping is often from door-to-door. The latter means more value-added services and –in addition –more close relationship with its customers. Thanks to the long-term relationships with its customers, the short-sea operators often are sailing under long-term contracts.

3. What are the current other (competing) methods of small vessel shipping transport (i.e. short-sea shipping)?

Barging, road haulage and rail

4. What currency dominates what shipping market?

At deep sea shipping the US dollar plays a dominant role. Shipping rates, price of new vessels, bunkering costs, port costs, etc., are quoted in USD.

At shipbuilding the US dollar is important, albeit the Euro is more and more used.

At short-sea shipping in Europe shipping rates are often in Euro, but can also be in GBP as the UK is the largest short-sea shipping market in Europe.

5. What is the SEEMP? The Ship Energy Efficiency Management Plan (SEEMP) incorporates best practices for the fuel efficient operation of ships, such as better speed management throughout a ships voyage, for example. Such efficiency measures will significantly reduce fuel consumption and, consequently, CO2 emissions. The SEEMP was developed through detailed discussions between member states, and with the advice and assistance of the international shipping industry, through a specialised working group on greenhouse gas emissions convened by the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC). The working group also discussed measures such as an Energy Efficiency Design Index, which will help to ensure that new ships are built as energy efficient as possible.

Eduard 6. How is maritime trade developing over the last decades?

Due to globalization, maritime traffic has more than tripled over the last decades and is expected to continue growing Growing demand from developed economies of North America, Europe and Japan leads to an increase in energy, container and mineral cargoes. Globalization leads to an international division of the production and consumption. Technical improvements in ship and maritime terminals facilitate the flows of freight. Economies of scale permit maritime transportation to remain a low cost mode, a trend which is strengthened by containerization. Figure 1. Development of international seaborne trade, selected years (millions of tons)

In 2007, world seaborne trade (goods loaded) increased by 4,8% to surpass 8 billion tons for the first time. World container port throughput grew by an estimated 11,7% to reach 485 million TEUs in 2007. Chinese ports accounted for about 28,4% of total world container port throughput.

7. What is the impact of containerization? Containerization has revolutionized cargo shipping. Today, approximately 90% of non-bulk cargo worldwide moves by containers stacked on transport ships [9]; 26% of all containers originate from China.[citation needed] As of 2005, some 18 million total containers make over 200 million trips per year. There are ships that can carry over 14,500 twenty-foot equivalent units (TEU), for example the Emma Mærsk, 396 m long, launched August 2006. It has even been predicted that, at some point, container ships will be constrained in size only by the depth of the Straits of Malacca—one of the world's busiest shipping lanes—linking the Indian Ocean to the Pacific Ocean. This so-called Malaccamax size constrains a ship to dimensions of 470 m in length and 60 m wide (1542 feet by 197 feet). However, few initially foresaw the extent of the influence containerization would bring to the shipping industry. In the 1950s, Harvard University economist Benjamin Chinitz predicted that containerization would benefit New York by allowing it to ship industrial goods produced there more cheaply to the Southern United States than other areas, but did not anticipate that containerization might make it cheaper to import such goods from abroad. Most economic studies of containerization merely assumed that shipping companies would begin to replace older forms of transportation with containerization, but did not predict that the process of containerization itself would have some influence on producers and the extent of trading.[6] The widespread use of ISO standard containers has driven modifications in other freight-moving standards, gradually forcing removable truck bodies or swap bodies into the standard sizes and shapes (though without the strength needed to be stacked), and changing completely the worldwide use of freight pallets that fit into ISO containers or into commercial vehicles. Improved cargo security is also an important benefit of containerization. The cargo is not visible to the casual viewer and thus is less likely to be stolen and the doors of the containers are generally sealed so that tampering is more evident. This has reduced the "falling off the truck" syndrome that long plagued the shipping industry. Use of the same basic sizes of containers across the globe has lessened the problems caused by incompatible rail gauge sizes in different countries. The majority of the rail networks in the world operate on a 1,435 mm (4 ft 8+1⁄2 in) gauge track known as standard gauge but many countries (such as Russia, India, Finland, and Spain) use broader gauges while many other countries in Africa and South America use narrower gauges on their networks. The use of container trains in all these countries makes trans-shipment between different gauge trains easier.

8. What are the main ports in Europe?

During the last 10 years the European Ports have grown over 3% per annum (CAGR). The Amsterdam Seaports have performed well above average together with other ports such as Bremen and Hamburg. The Port of Rotterdam is still, by far the largest port in Europe, measured in gross tonnage. In 2008 the Amsterdam Seaports had a market share in the Hamburg-Le Havre range of 7,7%. The Port of Amsterdam, the 4th largest in Northern Europe, has grown over 5,4% per year the last ten years. Figure 2. Port Performance in the Hamburg-Le Havre Range 10 years

9. What are ship size developments? Even larger containers vessels of up to 14,000 teu (i.e. Suez-max) are forecast to enter service before 2012. Continuing trend towards, larger ships is driving shippers to look for deep-water port locations. Increasing vessel sizes, requires specific infrastructure, handling capacity and hinterland throughput garanties. The draught and other infrastructure demands of such vessels are expected to be too much for many established smaller ports.

10. What are security issues in maritime trade?

Port security refers to the defense, law and treaty enforcement, and counterterrorism activities that fall within the port and maritime domain. It includes the protection of the seaports themselves, the protection and inspection of the cargo moving through the ports, and maritime security. Internationally, port security is governed by rules issued by the International Maritime Organization and its 2002 International Ship and Port Facility Security Code. Additionally, some U.S.-based programs have become de facto global port security programs, including the Container Security Initiative and the Customs Trade Partnership against Terrorism.

11. What is RFID? RFID stands for Radio Frequency Identification. It enables tracking and tracing of goods and vessels and thereby is a big enabler of efficiency, security and customer intimacy of maritime transportation.

Maria 12. What is the trend of world imports and its forecast? Since 1998, the imports around the world have followed a positive trend increasing at an average rate of 11% over the past 10 years. Especially relevant is the rapid increase since 2003 in which the rate of imports accelerates at a rate of 16%. The forecast indicates that the imports around the world will increase by 1040 billion dollars each year.

13. What is the trend of world exports and its forecast? The exports around the world have followed a positive trend over the past 10 years and have increased at an average rate of 12%. The exports followed very closely the trend of imports experiencing and abrupt change in 2003 in which the rate of exports accelerates at a rate of 16,5%. The forecast indicates that the exports around the world will increase by 1032 billion dollars each year which indicates that there are more countries that will import rather than export.

14. What is the trend of the industrial production of advance economies? The industrial production of advanced economies has followed a steadily positive trend over the past 10 years increasing at an average of 2% and experiencing a light decline of -2% in the past year. The forecast based on the overall performance of the past 10 years, indicates that the industrial production will growth at a rate of 1,4 units per year.

15. What is the trend of the world consumer prices? Consumer prices have followed a negative trend of -3,6% since 1998 up until 2007. However, consumer prices increased in 2008 by 52%. Despite this fact, the forecast of consumer prices indicates an overall decrease by 0,08 units each year.

16. What is TEU?

The twenty-foot equivalent unit (often TEU or teu) is an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals.[1] It is based on the volume of a 20-foot long intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks.[1] A related unit, the forty-foot equivalent unit (often FEU or feu) is defined as two TEU.

http://www.answers.com/topic/twenty-foot-equivalent-unit-1

17. What are the top European container ports?

With a total maritime container throughput of an estimated 90.7 million TEU in 2008, the European container port system ranks among the busiest container port systems in the world. There are about 130 seaports handling containers of which around 40 accommodate intercontinental container services (ESPO/ITMMA, 2007). The top 15 container ports are shown in the table.

18. What are the top European liquid bulk ports?

The liquid bulk market is the largest cargo handling segment in the European port system, when expressed in metric tons handled. Crude oil is the largest subcategory in the liquid bulk market. Other significant flows mostly include refined oil products.

19. On what criteria is a port selected?

Traditionally primarily the standalone physical attributes of a port are considered such as

• the physical and technical infrastructure • the geographical location • port efficiency • interconnectivity of the port • quality and costs of auxiliary services such as pilotage, towage, customs, etc.., • efficiency and costs of port management and administration • availability, quality and costs of logistic value-added activities • availability, quality and costs of port community systems • portsecurity/safety and environmental profile of the port • port reputation • reliability,capacity, frequency and costs of inland transport services by truck, rail and barge.

But more recently people are starting to base the choice for ports on overall network cost and performance. This adds the next three points

• Time costs of the goods (opportunity costs linked to the capital tied up in the transported goods and costs linked to the economic or technical depreciation of the goods); • Inventory costs linked to the holding of safety stocks • Indirect logistics costs linked to the aggregated quality within the transport chain and the willingness of the various actors involved to tune operations to the customer’s requirements, e.g. in terms of responsiveness to variable flows, information provision and ease of administration.

David:

20. What are the effects of the financial crisis on the world trade in 2009? World trade declined more than 11% in the first quarter of 2009. The declines are the largest ever. If we annualize these figures, the total decline will be 38%.

21. What developments in Port performance can we observe? Ports are facing increasing demands for a quick turnaround of vessels from customers with increasing size of ships. The main bottleneck in port performance is crane handling. Ports have not made any significant breakthroughs in container handling, neither does there appear to be any new radical solutions on the horizon. In the “Review of MaritimeTransport 2007” is was reported that, in Shenzhen, China, a crane capable of lifting 3 FEU’s (forty-foot-equivalents) came into operation. These crane improved the container handling from 60 boxes per hour to 64 boxes an hour. If a ship contains more than 5000 containers, these improvements don’t make much difference. A concept to further improve container handling efficiency has led one crane manufacturer to design, on paper, a crane capable of handling 4 FEU’s simultaneously.

22. How does the Logistics supply chain look like?

Environmental improvements in maritime shipping The maritime shipping industry is looking for ways to improve their environmental impact and overall cost structure. One major innovation is the use of skysails, see www.skysails.info . Depending on the prevailing wind conditions, a ship’s average annual fuel costs can be reduced by 10 to 35% by using the SkySails-System. Under optimal wind conditions, fuel consumption can temporarily be cut by up to 50%. The first commercial ships are using the SkySails right now and are being rewarded for their environmental improvement .