Knowledge Sharing :

Shipping fleet to become more niche-oriented

• Shipping industry worldwide is increasingly becoming globalised, notwithstanding the importance of national ship registries.

• While shipping tonnage will certainly carry national flag for purposes of international maritime administration, the fleet operations will be purely driven by global market dynamics.

• Shipping companies that have established themselves in different commodity and service trades and trading regions will however, have greater option to pursue their specialization and penetration, both vertically and horizontally in terms of niche marketing position.

• Tanker trade, major dry bulk trade, minor bulks, LNG, coastal trade, feeder service, container trade etc will grow into sizeable business and niche market opportunity in themselves.

Integration of shipping in logistics and global supply chains

• International shipping like other segments of the conventional transport industry is increasingly getting integrated in to the emerging global logistics and supply chain dynamics, owing to both external and internal dynamics.

• Major international shipping companies have themselves now started integrating their services into a broader spectrum of door-to-door delivery systems, incorporating rail-road haulage movements of cargo, thereby substantially supplementing their ocean freight income.

• Experience of recent freight depression has borne out that shipping companies have in fact more to gain by undertaking logistics integration of their cargo operations than just handling oceanic leg of cargo haulage.

• With global trade supply chains set to further expand with growing customer demands on cargo turnover time and costs, the shipping industry is bound to go through a major re-definition as a part of a larger maritime logistics web.

Expansion and multi-polarity of global trade

• The expansion of global trade volumes and growing multi-polarity of trade flows is going to impact world shipping as profoundly as did liner shipping and containerized cargo, some fifty years ago.

• While earlier phase of trade growth, saw Trans-Atlantic and Trans-Pacific trade grow at a rate much more than any other trade, the future promises to encourage a much more distributed global merchandise trade that can engage not only mega ships but also medium and smaller ships on shorter regional and coastal trade routes.

• increasing trade conferences and exchanges among Pacific-rim and Indian Ocean-rim countries that has gained acceptance promise to dispel any linear forecasts about larger and faster ships alone taking the prime spot eclipsing other segments of shipping trade.

Trends in International Ports

Key Issues

• Multi-cargo, Common User Port to Specialist Terminal-based Ports: Ports have been historically viewed as one-stop omnibus solution for all requirements of shipping, in terms all loading and unloading operations for multiple types of cargo, on a common access basis. However, the worldwide trend in port development is now veering towards terminalisation of ports with focus towards freight specialization. LNG terminals, Container terminals that involve high capital costs and intensive deployment of cargo handling equipment and other facilities are some instances of what is likely to emerge as future trend in port development.

• Separation of Port Authority And Port Operator: There is a global trend in the port sector towards growing separation of port authority from port operator impinging on all exiting institutional models of port organizations. Port organizations all over the world are experiencing wide ranging institutional reforms, as a part of the adoption to new demands of shipping and international trade. Port authority is increasingly getting focused on policy and regulatory role while a range of private port operations and port service providers are taking over a range of port related services.

• Inter-port Competition & Hinterland Access: There is an increasing trend towards redundancy of monopolistic structures of port access in regional and national port systems, with the growing trend towards multiple port system. Increasing customer pressures towards logistics rationalization of cargo movement between the cargo hinterland and ports, is leading to new ports being developed with consequent shift in movement of cargo out of the erstwhile single dominant discharge or lead ports. The shift of cargo from Mumbai port to Nhava Sheva port, or from major ports to new minor ports in the Indian port sector signifies the trend. A similar phenomenon is seen in international transshipment ports like Singapore, Tanjung Pelepas and Colombo.

• Growing clout of port users: The balance of power in the maritime trade, which traditionally was weighted in favour of the shipping line has now decisively shifted in favour of the shipper, whose cargo is being moved. In turn, the freight service providers have become a significant part of the value chain.

While several Greenfield port projects at Pipavav, Mundra, Dhamra have been proposed and taken up by private port developers, the experience of developing these ports has borne out that several contentious issues need to be resolved, before these projects really become viable. So far except Mundra port, all other Greenfield ports projects have not managed to achieve significant traffic as envisaged.

Cargo Traffic Demand: Greenfield port projects need to clearly establish the possibilities of generating a stable and growing volume of cargo that has distinct advantage in moving to the proposed Greenfield port location, in terms of landed or loaded freight, compared to their movement through the existing gateway port.

Logistics Linkages: Greenfield port projects need to offer a clear logistics advantage in terms proximity to cargo hinterland, rail-road connectivity and other facilities for handling cargo. The success of a Greenfield port project thus hinges on the extent of collaboration between wide range of institutions, including maritime development boards, railways, state governments and other service providers, who between themselves have to share the responsibilities, under a commonly agreed port development plan.

Preference of Shipping Lines and Shippers: Development of a new port implies that shipping lines see a rationale in operating their services to the new port and that economies of scale to operate their services are supported by critical threshold level of cargo volumes and parcel sizes.

Environmental Issues: Many a potential port projects, Tadri, Vardhaman etc have ended up in finally loosing steam because of environmental objections. Greenfield port projects need to be backed up a comprehensive national port development plan, based on Intensive environmental impact surveys by Nautical Advisor to the government. Port developers can in turn purely focus on developing the port and other facilities without having to obtain environmental clearance on a case-to-case basis.

Bankability of Greenfield port project: The litmus test of a Greenfield port project consists in the bankability of the project in terms of the expected returns on the potential business likely to be generated by the port. Effective risk mitigation strategy need to be in place in terms of role and responsibility of different players or stakeholders under a common consortia arrangement, as equity partners or guaranteers of the project. The State Maritime Boards or the government needs to provide collateral support.

Institutional Models of Port Organization (as articulated by World Bank). Following are some of the key modular structures of port organization in different countries.

• Service Port Model – where port authority & operator are one and the same (The Major ports of India)

• Landlord Port Model – where the port authority only own all the port assets and leases them out to private operators (JNPT)

• Tool Port Model – where the port authority selectively engages Private operators in areas where they do not wish to operate.

• Private Services Port – where the private port developer owns all the port assets and operates the all services. However, there are very few ports where the port operator owns the port land and sea front and these are only made available on long-term lease basis. However, minor ports in India have been developed as private services port model through land and marine front is obtained under long-term lease.

The Indian port sector is overwhelmingly under the influence of the "Services port model", with port trusts acting as port authority as well as a port operator. However, in recent years, there is a gradual movement towards acceptance of "landlord port model" with granting of certain terminal concessions and of other port-related services in major ports like Tuticorin, Chennai, Visakhapatnam and JNPT.

Tariff regulation has been one of the key policy instruments for defining competition policy so far. The Tariff Authority for Major Ports (TAMP) orders and guidelines however, only pertain to tariff issues of major ports and while the competitive framework of port business, now encompass a broader arena of activities, comprising minor and intermediate ports. The competition policy has to be thus, much broader in scope and force application. The regulatory authority also needs to be armed with powers to implement and enforce its decisions.

A ship is termed aground when the touches the hard ground.

A heavy iron implement usually in the form of a hook, lowered by means of chains from the ship on to the bottom of the sea to keep the ship safe from moving.

(1) Place where ships drop anchor, away from shipping lances, to wait until a lading or discharging berth becomes available or to take bunkers from a bunker barge or to discharge cargo to barges, or when laid up.

(2) A place where a ship may be anchored or berthed.

This is a bulk cargo definition referring to Iron Ore, Grains, Coal etc. when loaded into the hold the cargo may form conical shape. The angle thus formed, between the horizontal plane and the cone slope; on the left empty space; is called the angle or repose.

An area of water or enlargement of a channel used for the turning around of vessels.

(1) A loading or discharging anchorage allowing a ship to go alongside.

(2) This may also apply to a cabin in a ship.

(1) Berth alongside another ship. On this berth the ship awaits another berth before she starts loading and/ or discharging unless operation is done by lighters.

(2) Cabin of a ship with double berth or two beds.

An anchorage which is dangerous due to the possibility of hitting the ground or other vessel or due to an obstruction that impedes the safety of the vessel while in its berth.

A berth facility for drive on drives off or roll on roll off ships.

A berth with an access which is safe to navigation. During its stay the ship must not lie on the bottom of the berth as it is enforced in charter parties. However, in the charter parties sometimes it is admissible for the ship to touch soft ground.

Berths located in tidal harbours commonly used by coaster and small tankers. Also known as Mud Berths.

Comprises the number of handling activities involved for tonnage using the port facilities, regardless of its final destination but divided into loaded, discharged, transshipped and shifted cargo. Double banked vessels are excluded from berth throughput.

Although this last operation still requires port resources it could equality take place at moorings and this is not counted in that berth throughput but would be included in mooring throughput. The berth throughput allows the evaluation of present demand of a traditional break-bulk berth. It is also the basis to quantify the additional throughput possible through operational and organizational changes and through minor investment. The recording of double handing allows management to monitor the amount of tonnage thus handled.

Built, own, lease and transfer.

Built, own, maintain and transfer.

The arm of a derrick which projects outwards from the (upright) post and from which cargo is suspended. The boom is raised, lowered or swung by pulling or releasing ropes or chains, known as guys, by means of winches.

Built, own operate and transfer.

Built, operate, share and transfer.

Built, own and transfer.

Buoys are used to mark channels along which ships are approaching the ports and near lighthouses. The buoys can be in the shape of cone, can, sphere, bell sound, whistle sound etc.

A making or buoy showing where a ship is to lay at anchor.

A buoy located at the demarcation line near the mouth of a river or a port showing the bar area.

A floating mark showing danger area for navigation.

A buoy positioned outside the entrance of a harbour or in a channel, used as a marking to navigation. It is generally painted black and white with vertical strips in red and white. Fairway buoy is also called Mid-Channel buoy.

A small flat positioned in between the towing lines from the towboat on to the vessel which is being towed in such a way a to give a clear indication to pilots of the aft position of the vessel being towed, most especially in very sharp turns in the rivers which would result in difficult points.

Ring or "horse-shoe" in shape and made of either cork jablite or other approved material by life saving institutions. A life buoy is enveloped by hard canvas and thickly painted for preservation. This is easily inserted over the head and supported under the arms when in the sea. A self ignition light is attached by means of a short to the lifebuoy which can be used as a distress signal by person using.

Mooring buoy used by a tanker which allows her to swing with the tide.

Weight of cargo which a ship is able to carry when immersed to the appropriate load line, expressed in tones or tons.

(1) Amount of money paid to the ship owner by the charterer, shipper or receiver, as the case may be, for failing to complete loading and/or discharging within the time allowed in the charter-party. The rate of demurrage, normally an amount per day, is agreed in the charter-party. Some charters specify that, after a certain period of demurrage, either additional demurrage or damages for detention become payable. When demurrage becomes payable, it is said that she is on demurrage. Once a ship is on demurrage, on deductions are made for expected periods, such as week-ends, in the calculation of the demurrage charges; hence it is said that once on demurrage, always on demurrage.

(2) Scheduled charges payable by a shipper or receiver to a shipping line for detaining equipment at a container yard beyond the time allowed.

Amount of money the rate of which is agreed in advance, payable by the shipowner to the charterer, shipper or receiver, as the case may be, for loading and/or discharging in less than the time allowed; normally dispatch money, if a provision for it has been made, is at the same rate as, or half the rate of, the rate of demurrage agreed in the charter-party.

(1) Light structure which can only support pipelines, conveyors and lights vehicles.

(2) Structure, often of masonry, projecting out to sea, designed to projecting out to sea, designed to project a port from the force of the waves but also used to berth ships.