Question 01
Part A
01) )
A vessel Sharing Agreement (VSA) is an agreement between several container shipping lanes to
operate a liner service on a specific route with a specific number of vessels. The parties discuss
and agree on operational arrangements for the provision of liner shipping services, such as vessel
coordination or joint operation. The parties assume responsibility for one or more cycles of the
same line and offer the partners space on their vessel. The amount of space available to each
partner varies by port and is determined by the individual input per Slot Provider.
The scope of liner service coverage, port rotation, frequency of service, number of vessels in
service, the capacity of container vessels assigned, individual allocation of each participant in
each vessel, active information on ships (service speed, fuel consumption, etc.), port stay
Planned stay, planned cruise time, schedule reserves. (Varbanova, 2018).
The Slot Charter Agreement (SCA) is a contract between two partners/shipping businesses to
acquire and sell a number of sets over time in order to expand coverage. The contract is often
made between the partners at an agreed-upon price on a "used or unused" basis for a specific
reserve (space, weight) for a specified length of time.
Even though these are two different agreements, slot re-allocation procedure is critical because it
is the primary transaction among VSA members.
02)
CMA CGM / APL, Cosco Shipping, and Evergreen Line are members of the Ocean Alliance,
one of the three major maritime alliances that facilitate slot-sharing and vessel-sharing
agreements (VSAs) among the world's largest carriers. These groups are commonly referred to as
carrier alliances.
Container carriers formerly collaborated through VSAs and slot agreements, indicating a deeper
and more formal alliance relationship. Alliance members typically provide weekly services that
span all main trade corridors. Members pool their resources and commit to a set number of boats
for each service, resulting in a set capacity. It should be stressed that this collaboration is limited
to operational areas, with each member performing independent sales and marketing operations.
The largest market share is held by numerous coalitions. The Ocean Alliance (23.5 percent) and
the 2M Alliance (27.7 %) control around 51.2 % of global TEU movements (Shipping Alliances
2022: Explanation and Overview, n.d.) Because of their scale, these alliances can negotiate lower
port rates and increase throughput. Discounts. This expense enables the savings lines to remain
competitive, and the savings are sometimes passed on to customers.
03)
Ocean Alliances are carrier organizations that have agreed to pool their vessel fleets in order to
extend their service offerings and geographical coverage. All alliances operate on an equal
footing, and their core areas of communication and information sharing include storage,
navigation and scheduling, as well as problem solving. They also debate openly fuel kinds,
environmental concerns, operational efficiency, and how to control engine defects. Each
shipping alliance also includes capacity planning, unique carrier contributions, and specialized
pay. Simply put, the more the carrier's investment in an alliance, the higher the return on hoarded
boats and trade channels.
The port faces various challenges due to the high power of the alliances. Their request should be
restructured after considering the fees. When the ports do not provide what the coalition
demands, they have the monetary power to build similar terminals and run their business. They
can also move a large business from one port to another. Therefore, the alliance significantly
affects the operations of the container port.
04)
The port of Tanjung Pelopas is located on the eastern mouth of the Pulai River in Johor,
southwest of Malaysia. The port became operational in October 1999 and was officially launched
in March 2000. It set a world record as the fastest-growing port handling one million TEUs in its
first 571 operating days.
This port was built by Maersk shipping line due to Singapore port reject one of the requirements
of their agreement. Hence Maersk line build the Tanjung Pelapas by their terminal operator,
APM terminals. This leads to massive loss to Port of Singapore and birth of Port of Tanjung
Pelapas.
Tanjung Port is served by a single container terminal. The container yard, which covers an area
of 1.8 million square meters, can handle eight million TEUs per year. It has a total storage
capacity of 6,237,000 TEUs and 37,800 ground slots. They have one of the smallest average ship
turnaround times in the region. It started to serve container throughput of Maersk line but due to
its strategic location, expertise in the field and competitive pricing various shipping lines use this
terminal as well.
05)
Number of cranes deployed = a
Total number of movements
Crane intensity=
Cranes deployed
Crane intensity = 3.8625
Total number of movements = 3090
Cranes deployed = 3090/3.8625 = 800
M.V. OOCL HAMBURG's operation completion time = (800/25) + 1 = 33 hours
PTP should prioritize their operation as the ship needs more than one day to complete their
operations and it leads to other late charges along the journey.
Part B
01)
02)
Usually, this problem occurs when a terminal matures. There are short term and long-term
solutions that can be implied to solve this problem.
Since long term solutions consists of building new terminals and expanding current facilities in
this scenario short term solutions will be discussed. Accordingly, improving the efficiency of
logistics facilities inside port is suggested as a viable solution in this case.
Logistics facilities are one of the two pillars of seaborne trade: port infrastructure and logistics
services.
Specifically considering the efficiency of new IT systems, terminal automation can be
considered as a one solution. Additionally, intra terminal transportation and cargo handling needs
to be improves. With these implementations, efficiency increases and ultimately terminal can
handle more that its initial designed throughput.
03)
For vessels in the specified line, the vessel operator and container terminal agree pro-form
anchor windows. The projected number of container lifts, as well as the needed day and time of
week, are used to define the anchor window. Vessels will arrive and depart at the Pro-Forma
anchor window arrival and departure timings unless otherwise arranged.
Anchorages that have been designated as dedicated are reassigned. These are typically learned in
terminals along a shipping lane. They offer their owner exceptional services.
PTP should concentrate on its activities because it has a shipping lane. As a result, the majority
of PTP should be provided by specialized anchor windows.
Question 02
01)
Evolution of the seaport is discussed in three theories:
Any port Model
UNCTAD Model
Work Port Model
The WORK PORT project started with the UNCTAD model, and the research focused on
creating a new model that would incorporate aspects of the existing model as well as
advancements over the next decade.
The WORK PORT model discovered that ports continue to evolve, adjusting to new
technologies, new legislation, altered procedures, and other influences as needed, rather than
evolving in discrete phases. Furthermore, it demonstrates that multiple streams of evolution can
be observed concurrently and that the rate of change varies significantly with each flow. Ports
are notable for having many terminals, some of which operate along traditional lines while others
may be cutting-edge in terms of technology, labor habits, or other factors; they can all be as
effective (Beresford et al., 2004). As a result, the WORK PORT model acts as a guide for
spotting patterns and investigating potential port adaptation measures.
Considering the evolution of port industry, with the containerization their operational standards
have increased drastically. If we consider this from the WORKPORT model perspective,
evolution can be categorized into three areas: Port site, Containerization, Mega port facilities and
Automation.
Changes in ships and handling equipment resulted in new site requirements over time.
Containerization contributed greatly to the separation of terminals and the construction of major
buffers in the setting of big warehouses due to congestion, capacity, and internal transport
capacities. Commercial opportunities and strategic locations along the marine transport channel
allowed a small set of ports to grow and develop into mega ports. (e.g. – Rotterdam, Antwerp).
The increasing number of container terminals necessitates terminal automation through the use
of information systems and equipment. Considering all these facts it can be stated that based on
the dimensions of WORKPORT model, container ports have evolved their operational standards
in tandem with the container shipping industry over the last few decades.
02) .
As a result of the growth of inter-mode transport corridors between ports and internal inter-mode
terminals, some port-based supply operations, such as distribution centers, may transfer into the
country, directed by supply trends such as centralization and site optimization. However, in some
cases, the port may need to keep or attract these industries, especially if it has acreage and does
not have congestion issues.
The usage of a new terminal site in addition to the existing one is known as terminal migration.
When a terminal is relocated, the previous terminal facility is closed, and the terminal is moved
to a new location. Migration and relocation of port terminals are for a variety of causes. The
explanations and instances are listed in the table below.
Driver Strategy Description / example
Limitations in draft form Relocation/Migration Larger vessels require deeper water
access to the port.
Land availability Migration Existing real estate is not sufficient for
port operations and supply services.
The terrain areas of the terminal need
to be expanded.
Cost differences Relocation Land, labor and capital expenditure
are high. Operational expansion does
not apply.
Liner connectivity Relocation Linear shipping requires better
connectivity.
Requires less port navigation time.
Inland connectivity Migration/Relocation Internal capacity is not sufficient.
The lack of intermediary access
should be improved.
Environmental restrictions Relocation New regulations on port
environmental impact.
Government regulations.
Competition Migration/Relocation Regional ports Competitive pricing
and better connectivity.
Political and administrative Relocation Political changes in power and
authority.
Administrative decisions of the Ports
Authority.
03).
In the early stage, seaports had a sellers’ market where they had more bargaining power as only
few ports were available to the shipping lines. Currently, seaports are an industry where the
buyer has more bargaining power, buyers’ market. With the time many seaports opened around
the world and power of shipping lines also increased with mergers and acquisitions.
Bundling of services implied by many seaports due to this market behavior. ports provide
attractive service bundles to their customers, and it decreases the customers the ability of
switching from one terminal to another.
The company operating the terminal can also offer pilot, tow and inland transport services as
bundled services. While some bundled services are natural monopolies, such an arrangement
prevents them from entering each market. The geographical and dynamic integration of ports in
large regions and networks contributes to the aggregation of port services (Notteboom et al.,
2021). Thanks to the rapid restructuring of supply chains embedded in ports, they are not only
the locations of specific activities but also the element of value-based chain systems. The various
supply stages of the emerging flow-based system are closely synchronized, and the various
transport services are frequently added.
In order to attach their current customers and attract potential customers, seaports should
introduce such services and market them accordingly.
Question 04
01)
The Port of Colombo is easily located near some of the busiest shipping lanes in the world. Due
to its natural geographical location, the Port of Colombo has evolved into a major hub
connecting the East-West shipping lanes in South Asia. It started out as a sellers 'market, with
fewer options for shippers, but later transformed into a buyers' market, with the Port of Colombo
having less bargaining power.
Discounts and waivers are types of discounts offered by the Ports Authority for specific
operations. These vary between ports, and the Ports Authority of Sri Lanka is the policy maker
for repayments and waivers at the Port of Colombo. These exemptions apply to traditional cargo
handling operations, container handling and Colombo Port shipping. For example, according to
Shipping Operations (SLPA, 2021), "25% refund will be given for maintaining feed at any
anchorage for as long as the vessel is self-sufficient". Customers are attracted to these pricing
methods.
In addition to the aforementioned operations, SLPA may be able to propose new rebates and
waiver reliefs for transshipments goods, as our market is heavily reliant on them. Transshipments
that are not tied to India, in particular, must improve, and adopting such will assist Sri Lanka.
02)
The supply chain is a network as well as a process. It is, first and foremost, a network between an
organization and its suppliers for the manufacturing and distribution of a product or service. It is,
secondly, a process that involves different stages to get the product to the end user or consumer.
Most of the products/services, the winner is the one which is available to the consumer. As a
result, the agile perspective, typified by "quick response" and similar initiatives, has emerged
(Christopher & Towill, 2001).
Ports plays a major role in almost all the supply chains. With the globalization of trade, all
manufacturers have gone to global sourcing and global sales. Hence, port become a vital point to
many supply chains. The supply chain and logistics are inextricably linked with a reliable
maritime service and an agile port service. Furthermore, it is based on adaptable internal
transport, timely documentation, and fluid information flow. As a result, all shipping industry
participants must provide efficient intercontinental transport services. All operational
requirements must be managed extremely carefully; Otherwise, they may incur significant costs
and cripple the concept of a narrow supply chain..(Beškovnik, 2011).
With containerization, most of the global good’s transportation moved to the containerized
cargo. This leads to the higher involvement in the port sector. Quay side operations, Transfer
operations, Yard side operations are the three domains of a container operations in a port. Agility
of these operations contributes to minimize the (average)vessel turnaround time and to maximize
the (average) throughput of the terminal. Ultimately this contributes, supply chains to become
more responsive. Hence improving these operations in the ports helps organizations to adopt
quickly according to their customers need.
To incorporate agility to the ports, introducing a new operational and information flow,
eliminating time consuming repetitive operations and communications, implementation of ICT
systems is important. With these additions, ports will be able to adjust to the agile supply chain
requirements.
03)
Port of Colombo (CMB) is a third-generation port focusing on trade-based services. Currently,
CMB consists of four main terminals: JCT, ECT, SAGT, and CICT. Meanwhile, WCT is the
next phase of the Colombo Port Expansion Project. Since its inception, CMB has already thrived
on being competitive in a competitive industry. Therefore, CMB has focused on several key
areas of the supply chain that affect and depend on port operations. Later developed as a
container port, the CMB was built to handle deep-sea ships and new major ships.
Port container terminal automation can be divided into two sections similar to the problem
mentioned.
• Information flow
•Equipment and operations
Moving on to the information flow, the main needs for the initial implementation are the Port
Community System (PCS) and the National Single Window (NSW). The port's information flow
must be transparent and agile, and these two tools aid in this endeavor.
PCS is a transparent and open Internet network that streamlines, manipulates, and automats port
clearance and delivery procedures without interruption, allowing both public and commercial
players to exchange intelligent and secure information. PCS allows you to connect different
stakeholders' trade, supply, supply, and transport chains to maximize the use of physical
infrastructure and manage port operational efficiency.
Allows NSW firms to register data and documents through a single point of entry or single
window, ensuring compliance with all regulatory requirements for import, export, and
transportation. The primary goal of NSW is to reduce the cost and time spent by vendors in the
clearance process by obtaining numerous clearance certifications and licenses through
collaboration and digitization between public and commercial entities. Because SW does not
have a standard model, it differs depending on the demands and designs of each country. Further
automation is possible thanks to ASYCUDA's interface with NSW, a computerized customs
management system that handles customs declarations, accounting, migration procedures, and
manifest statements. In addition, the system creates trade data that can be used in statistical
economic analysis.
In this sense, the equipment also plays a significant influence. Automated sensor technologies, as
well as rail-mounted gantry (A-RMG) cranes, automatic rubber-tire gantry (A-RTG) cranes,
automatic stacking cranes (ASC), and automated straddle transmission (AutoStrad) have the
potential to improve the automation of semi-automatic and automated terminal tractor (Auto TT)
container terminals. In the context of Sri Lanka, ASCs AGVs offer a lot of promise to improve
our operations. Those devices also have a high level of automation capacity. In the table below,
the benefits and drawbacks of these two methods are contrasted.
ASC + AGV
Pros Cons
Stacking density is high. Vessel productivity may be relatively low
Less Labor Ground handling can be complicated
High potential for automation High capital costs
Better service from the gate/road truck
Selectivity is high.
However, considering the bright side, it is recommended to go for automation as it will
significantly improve port operations.
References
Beresford, A. K. C., Gardner, B. M., Pettit, S. J., Naniopoulos, A., & Wooldridge, C. F. (2004).
THE UNCTAD AND WORKPORT MODELS OF PORT DEVELOPMENT:
EVOLUTION OR REVOLUTION? Maritime Policy & Management, 31(2).
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Beškovnik, B. (2011). AGILE PORT AND INTERMODAL TRANSPORT OPERATIONS
MODEL TO SECURE LEAN SUPPLY CHAINS CONCEPT. Promet-
Traffic&Transportation, 23(2), 105–112.
Christopher, M., & Towill, D. (2001). An integrated model for the design of agile supply chains.
International Journal of Physical Distribution & Logistics Management, 31(4), 235–246.
https://doi.org/10.1108/09600030110394914/FULL/XML
Notteboom, T., Pallis, A., & Rodrigue, J.-P. (2021). Port Economics, Management and Policy.
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SLPA. (2021). SRI LANKA PORTS AUTHORITY TARIFF - 2021 This booklet contains the
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