Presentation on container shipping industry

By Rupesh RegeDiv. – B

Roll No. -079

Introduction to Shipping

Shipping Industry, the industry devoted to moving goods or passengers by water. Passenger operations have been a major component of shipping, but air travel has seriously limited this aspect of the industry. The enormous increase, however, in certain kinds of cargo, for example, petroleum, has more than made up for the loss of passenger traffic. Although raw materials such as mineral ores, coal, lumber, grain, and other foodstuffs supply a vast and still growing volume of cargo, the transportation of manufactured goods has increased rapidly since World War II.

About India

India is an emerging global economy

Over 8% GDP growth in 2008 and expected GDP 6.5% this year and estimated at 8% in 2010-2011.

Good Industrial growth.

Robust macroeconomic fundamentals.

Worlds largest democracy.

Growing Market for Investors

About India

India has a coastline of 7517Kms

Is located in the International route between East and West

Thus it has an advantage and is developing into a major Maritime nation

Indian Shipping Industry

India presently has 938 ships

Its Coastline is dotted with 12 Major ports and 187 intermediary ports

Its fleet caters to only 13% of its overseas trade. This is very low, a fact which the Govt. has realised

Indian Shipping Industry Indian Govt. has introduced the tonnage tax a few years ago which has been welcomed by ship owners and has resulted in growth of Indian tonnage and further growth is expected

42% of Indian fleet is over 20years age and needs replacement

Also the policy makers have set a target of over 12 million GT to be achieved in next 3 years.

All the above entails an investment of approx.12Billion US$.

The importance of shipping

International shipping carries 90% of the world’s trade. It is the lynchpin of the world economy.

Ships are large valuable assets of a sophisticated kind. Larger vessels can cost over USD 100 m to build.

World freight is an estimated USD 380 billion per annum.

Introduction to Maritime Shipping

Ships carry 99% of overseas trade in volume terms and 62% in value terms, the remainder being conveyed by air.

90% of all international trade moves by sea

Globally, the ton-miles of freight moved by water are more than twice the total ton-miles moved by road, railway, and air put together.

Water transportation is less costly and more energy efficient than other modes of transport:

Maritime Shipping: Cargo Types

Dry Bulk(salt, grain, minerals, cement/gypsum, coal byproducts) Liquid Bulk(crude oil, gasoline, chemicals, liquefied natural gas) Break Bulk(steel, lumber, heavy machinery) Automobile Containerized(finished consumer goods)

Maritime Shipping: Major Players

• Shippers (importers/exporters)(Nike, Wal-Mart, ExxonMobil, Toyota)

• Shipping lines (ocean carriers, vessel operators)(Maersk Sealand, MSC, CMA CGM, Evergreen, Hapag Lloyd)

• Seaport terminal operatorsMorton Salt (dry bulk)Shell Oil (liquid bulk)Toyota (automobile)

Containerized cargo:PSA Corporation (Singapore)Hutchison Port Holdings (Hong Kong)Dubai Ports World (United Arab Emirates)APM Terminals (Netherlands, Denmark)

• Railway operators(Union Pacific, BNSF, CSX, Norfolk Southern, CN, CP)

• Trucking companies (motor vehicle carriers)

Key players

Container ShippingWorld fleet, Feb 2004: 3167 vessels, capacity = 6.5 million 20-ft conts. (TEU)

World fleet, Dec 2008: 4661 vessels, capacity = 12.1 million 20-ft conts. (TEU)

Container Shipping

ContainersContents furniture, toys, footware, clothing, auto parts, electronics, computers, bananas, pineapples, foodstuffs, meat, fishSizes 20' x 8' x 8.5' high (TEU) 40' x 8' x 8.5' high (FEU) 45' x 8' x 8.5' highCapacity 30 tonsWhere are they manufactured? ChinaTypes standard dry, high cube (9.5' high) (90%) refrigerated ("reefer") (5%)other: ventilated, open top, adjustable height (5%)Quantity Global stock = 35 million (10 mill leased); 3.5 million produced in 2008Cost New: $2000 - $20,000; lease rate $1 - $6 per day (5 year term)

Types of container

1) Dry container

Reefer container

Opentop container

Flatrack container

ContainersHoisted, lowered, and secured at the cornersSecured aboard vessels, trains, truck chassies using(1) twist locksfor securing adjacent containers in the same stack(2) lashing rods (vessels only)for securing containers in high tiers directly to the deck

vessels

VesselsCapacity from 100 to 14,000 TEUDivided into 45’ sections called bays ship length can be from 3 to 25 baysNewbuild cost $1 million per 100 TEU capacitySpeed 20 - 25 knotsFuel Marine diesel oil; efficiency ~ 500 ton-miles/gal20 crew members captain/master, 3 deck officers, chief engineer w/ 3 assistants,radio operator, cooks, qualified members of the engine department(QMEDs), etc.Fully cellular or geared Geared vessels can unload and load themselvesItineraries are cyclical Every 4 weeks: Naples-Genoa-Barcelona-New York-Norfolk-Charleston-NaplesWhere are they built? Korea: Hyundai, Samsung, Daewoo, Hanjin China: Jiangsu, Shanghai, Xiamen, Dalian

The Shipping Line Business 2010 TEU deployed Revenue Ocean Carrier Country in 2009 (billion $)

1. A.P. Moller-Maersk Denmark 1,600,0122. Mediterranean Shipping Co Switzerland 937,1453. CMA CGM France 597,677 11.84. Evergreen Taiwan 539,8015. Hapag-Lloyd Germany 448,840 8.86. Cosco China 385,368 6.57. China Shipping Cont. Lines China 339,545 5.38. Hanjin South Korea 328,327 7.49. American President Lines Singapore 323,319 8.210. NYK Japan 313,049 25.811. Mitsui OSK Lines Japan 284,848 19.412. OOCL China (HK) 268,502 5.213. CSAV Chile 249,885 4.114. K Line Japan 241,772 13.315. Yang Ming Taiwan 223,192 4.1

Top 20 container ship lines

The Shipping Line Business: Planning Decisions

Decision

1. When to purchase/charter additional vessels?2. What kind of vessels to purchase/charter?3. When to sell/scrap old vessels?4. Which vessels to sell/scrap?5. Which ports should be served?6. Which routes should be served?7. Which vessels should be assigned to which routes? (“fleet deployment”)8. Scheduling the vessels assigned to each route. At what times will theyarrive/depart from each port in the route sequence?9. Determine performance requirements for each vessel at each port.How fast must each vessel be served at each port it visits?10. Negotiating vessel service agreements with seaport facilities (containerterminals).11. Hiring crew members

The Shipping Line Business:Operational Decisions

Decision

1. What should the freight rates be?2. When to cancel a vessel call at a port?3. Which containers should be loaded onto which vessel?(applies to large shipping lines or lines belonging to an alliance)4. How many empty containers should be loaded onto each vessel at eachport? (“empty container repositioning”)5. Where should individual containers be placed on the vessel?(“vessel stowage”)6. Assigning crew members to vessels.

Introduction to Container Terminals

• Unloading and loading of containerships• Temporary storage of containers

The Container Port BusinessWorld’s Busiest Million TEUContainer Ports Country handled in 20101. Singapore Singapore 27.92. Shanghai China 26.23. Hong Kong China (HK) 24.04. Shenzhen China 21.15. Busan South Korea 13.36. Rotterdam Netherlands 10.87. Dubai UAE 10.78. Kaohsiung Taiwan 10.39. Hamburg Germany 9.910. Qingdao China 9.511. Ningbo-Zhoushan China 9.412. Guangzhou China 9.313. Los Angeles USA 8.414. Antwerp Belgium 8.215. Long Beach USA 7.3

The Container Port Business

Million 2010 TEU handled RevenueTerminal Operator Country in 2007 (billion $)1. Hutchison Port Holdings China(Hong Kong) 66.3 4.92. PSA Corp. Singapore 58.9 3.03. DP World UAE 43.3 2.74. Cosco Pacific China 39.8 0.15. APM Terminals Netherlands 31.4 2.56. HHLA Germany 7.2 1.9

Globally, 474 million TEU worth of (empty and loaded) containerswere transferred between ships and shore in 2007.

The DP World controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to DP World, and whether such a sale would compromise port security.

Container Terminals

Land-Scarce Container Terminals

Cargo stacked up to7 tiers high in large“blocks”

0-3 truck traffic lanesbetween blocks

Storage density:1000-1200 TEUper hectare

Manually operatedtrucks and cranes

No on-dock rail yard Port of singapore Cargo throughput:2000-2500 TEU per meter of wharf line per year

Land-Scarce Container Terminals

Port of hong kong

Straddle Carrier-Based Container Terminals• Common on U.S. East Coast and in Europe• Cargo stacked 3 tiers high in “lanes” that are 1 container wide• Spaces between lanes very narrow• Storage density: 750 TEU per hectare• Manually operated straddle carriers perform operations 2 and 3• On-dock rail yard a possibility: RMGCs may be needed• Cargo throughput: 1500 TEU per meter of wharf line per year

Straddle carriers(SCs)

Port of Hamburg

Wheel-Based Container Terminals• Common on U.S. West Coast• Loaded containers sitting on trailers (chassies) parked in storage yard (stacking height = 1 tier)• Empty containers stacked up to 4 tiers high by “side-picks”• Storage density: 250 TEU per hectare• Manually operated equipment• On-dock rail yard a possibility• Cargo throughput: 500 TEU per meter of wharf line per year

Quay cranes (QCs

Automated Container Terminals II• Patrick Terminal at Port of Brisbane• Only automated SC-based terminal in the world• Cargo stacked 2 tiers high in “lanes”• Automated straddle carriers perform operations 2 and 3

Patrick Terminal (Brisbane, Australia)

Railway Container Transportation

Railway Container Transportation2010

North American TEU moved RevenueRailway Operator Country in 2007 (billion $)1. BNSF USA 5,065,0052. Union Pacific USA 3,453,0003. Norfolk Southern USA 3,120,0004. CSX Corp. USA 2,111,0005. Canadian National Canada 1,324,0006. Canadian Pacific Canada 1,238,1007. Kansas City Southern USA 526,370

Containerization Impact on Cities Container shipping supplies cities and their inhabitants withfinished consumer goods

Chicago: inland container shipping hub of the USA

Milwaukee: CP “Canadian Pacific” rail facility at the Port of Milwaukee

Congestion

Pollution

Maritime shipping constitutes 4.5% of global CO2 emissions

Conclusion

Containerization Impact on Cities Inspired architectural innovation