The importance of maritime freight transport

©Abdulla Wanis Tabet / July 2017

PRESENTATION OUTLINE

TRADE COSTS INTERNATIONAL TRADE FLOW

TRANSPORT COMPONENTS TRANSPORT COST STRUCTURE

TRANSPORT MODES WATER TRANSPORT

WATER TRANSPORT CHARACTERISTICS

WORLD SEABORNE TRADE SIZE

MARINE CARGO WORLD MERCHANT FLEET

LIQUID BULK (ENERGY) TRANSPORT

DRY BULK TRADE

CONTAINER SHIPPING

OTHER CARGOES

THE LOGISTICS TECHNOLOGIES IN THE FORESEEABLE FUTURE

CONCLUSION

Trade costs

Transaction

Tariffs

Time Transport

Transport

Infrastructure Transport

Services

Transport

Environment

Transport and transport component TRANSPORT is process of the physical movement of materials / persons

between points in the supply chain

Transport conditions are : safe , efficient , reliable , and suitable

movement of persons and goods over time and space.

Necessity to transport::

1) Place Utility.

2) Employment Opportunities.

3) High Standard of Living.

4) Distribution of Perishable Goods.

5) Industrial Development.

Transport modes

Transport Modes

Air

Water

Land intermodal

River

Pipeline

Rail Road

Sea

Mode Fixed Costs Variable Costs

Rail High- Equipments, Terminals ,

Tracks ,etc

Low

Road Low-Highway provided by

government

Medium-Fuel , Maintenance, etc

Water Medium-Ships and Equipment Low-As capacity is huge

Pipeline Highest-Right of the way ,

construction, Equipment for

control station and Pumping

capacity

Lowest-Insignificant labour costs

Air Low-Aircraft and cargo handling

systems

High- Fuel, labour, Maintenance

COST STRUCTURE OF EACH TRANSPORT MODE

Choice of Modes * Choice of mode depends on a variety of factors such as :

nature and volume of materials to be moved and distance.

SPEED VOLUME SECURITY COST TYPE OF GOODS

HIGHWAY High Low Medium Low All

RAIL Medium High High Medium Commonly for heavy and

large loads

WATER Low Very High High Low Commonly for heavy and

large loads

AIR Very High

Low

Very High

High urgent, perishable goods or

of high value

MULTIMODAL High Medium Medium Medium All

World Transport modes usage

• Water transport uses ships and large commercial vessels that

carry billions of tons of cargo.(85-90% international trade)

• water transport is used primarily for the movement of large bulk

commodity shipments and it is the cheapest mode for carrying

such load. (economies of scale )

• Water transport is particularly effective for significantly large

quantities of goods that are non-perishable in nature and for

cities or states that have water access.)locative benefit)

Water transport

Water transport characteristics

It is a relatively economical mode of transport for bulky and heavy

goods.

The cost of maintaining and constructing routes is very low because most

of them are naturally made.

It promotes international trade.

The depth and navigability of rivers and canals vary and thus affect

operations of different transport vessels.

It is a slow moving mode of transport and therefore not suitable for

transport of perishable goods.

It is adversely affected by weather conditions.

Sea transport requires large investment on ships and their maintenance.

Basic types of water transport;

* Rivers and Canals →

← * Coastal Shipping

* Ocean Transport →

MARITIME TRANSPORT

World seaborne trade as @ 1/1/2015

Seaborne Trade is exchange or transfer of capital, goods, and

services via sea across international borders or territories

World trade demand and its value by 2020

Commodity prices decreased over last 24 months

which promote maritime transport

saG

Maritime cargoes

Other Containerized Dry Bulk

Minor Major

Liquid Bulk (Energy)

Product Crude

Main maritime routes

World merchant fleet as @ 1/1/2016 (ISL ,2016)

Bulk32.9%- GC 21.2% -Crude13.7% -Con10.2%-Ch10.1% -RORO-PAX8.4% -Gas3.4 %Total 51409

WORLD OIL (ENERGY) TRANSPORT

Tankers

Chemical tanker Product

LPG

Bulk carriers

Bulk carriers (dry bulk)

Dry bulk cargoes

• Major Dry Bulks:- Iron Ore

Coal (Steam for Power) (Coking for Steel Production)

Grain (Wheat, Corn, Soya, Sorghum, etc)

Bauxite and Alumina

Phosphates

Minor Dry Bulks:- Forest Products such as

Packaged Timber, Newsprint , Paper Pulp & wood chips.

Animals Feed & fertilizer

Sugar, Rice , salt

Cement, gypsum & sulphur

Steel products, steel scrap, non-ferrous metal ores.

Dry bulk trade 1992-2012

Dry Bulk Trade Growth 2005-2020

Container shipping

Container ship evolution (generations)

Containerization advantages

1- Standard transport product

2- Flexibility of usage

3- Management

4- Economies of scale

5- Speed

6- Security

Global containerized trade 1996-2015

World market share % Fleet capacity

(Million TEUs)

Company

15.2 3.048 MAERSK

13.4 2.678 MSC

9 1.794 CMA CGM

4.8 0.953 EVERGREEN

4.7 0.945 HAPAG-LLOYD

4.3 0.864 COSCO

3.5 0.700 CSCL

3.11 0.629 HAMBURG-SUD

3.10 0.620 HANJIN

3 0.592 OOCL

Largest Container Shipping Companies as @ 1/1/2016

Containerization challenges

1- Site constraints

2- Infrastructure costs

3- Stacking

4- Thefts and losses

5- Empty travel

6- Illicit trade

Other cargoes (general cargo)

Drones

Driverless vehicles

robotics

3-D printing

Wearable technologies

The logistics technologies in the foreseeable future

Total price of any Commodity/product includes

initial price 60-65% + added Value 35-40%

Transport cost is one of the most important added value to the commodity/product final price

Factors affecting choice of any transport mode are : fixed and variable costs , speed , security, volume and type of goods

Temporal and locative benefits come @ the top of transport benefits

Maritime transport achieves economies of scale in comparison with other modes of transport

About 80% of international maritime transport activities (fleet) are dry & liquid bulk beside containerization

Demand for maritime transport grows steadily over last decades and carrying about 85-90% of the international trade volume

Far East ports are the largest and busiest ports in the world due to region’s economic boom

Continued declining of commodities prices will promote international maritime transport

Drones and IT technologies will affect transport and sea port activities in the near future

References

companies/-/logistics09/03/2016http://cerasis.com/

Cerasis is a third party logistics company

www.clarkson.com

www.cruisemapper.com

wiki/2259-largest-container-ships

www.drewry.com

www.unctad.org

www.utk.edu

University of Tennessee, Knoxville’s Global Supply Chain Institute

www.wto.org

©Abdulla Wanis Tabet July 2017