Congestion pressure mounts
by Phil Hastings

Worsening port congestion in several parts of the world is adding urgency to already loud shipper demands for more efficient maritime logistics operations to support their global supply chain activities.

Those pressures are, in turn, stimulating renewed debate over who should be in the driving seat when it comes to managing and controlling those operations - the shipping lines or third party logistics providers such as the leading international forwarding groups.

Meanwhile, all the parties involved agree that they need to co-operate more closely to improve the overall efficiency of maritime transport-based supply chains.

Growing worldwide interest in the concept of "maritime logistics", as opposed to simple maritime transport, has been reflected in the creation over the past few years of several new bodies dedicated to that subject.

In Europe, for example, Erasmus University in Rotterdam established its own Centre for Maritime Economics and Logistics in 2000. More recently the US state of Georgia set up a Maritime Logistics Innovation Centre.

MEL director Professor Hercules Haralambides says the subject covers a broad field, adding: "...maritime logistics, a term that as you know was coined at Erasmus University,  has to do with the optimisation of the overall global supply chain process...in our view anything which can be done to improve the efficiency of door-to-door transport, comes under the term maritime logistics..."

His colleague, MEL business development manager Martin Ilmer, confirms that increasing containership sizes and worsening port congestion, notably in Europe and on the US west coast, are becoming key issues in that context.

"Shipping lines are ordering vessels with capacities in excess of 7,500-8,500 TEU to achieve economies of scale," he says. "However, in terms of the overall supply chain, you have to look at how that will affect port terminal and hinterland operations. Economies of scale at sea could lead to sub-optimisation in other parts of the chain."

A similar point was made by the president and chief executive of Neptune Orient Lines, David Lim, when he addressed a maritime conference in the US earlier this year.

In a reference to the introduction of larger container vessels to serve growing Asian export trades at a time when Europe and the US were experiencing port terminal congestion, David Lim said: ""The larger ships could carry more but they could not discharge more. So big ships became large floating warehouses, adding cost rather that throughput capacity to global supply chains."

Mr Ilmer says all the participants in the supply chain will have to work more closely together to deal with such issues, adding: "Awareness of that need is increasing. However, the issue is still a hot potato. Everyone wants to put the problem into someone else's hands."

The director of Georgia's MLIC, Page Siplon, agrees there is a need for increased co-operation between the various parties involved with maritime logistics. However, he continues, there is still a lot of work to be done in improving the efficiency of individual sectors.

As examples, he cites several projects which the MLIC is developing with the Georgia Ports Authority. One is designed to reduce the port of Savannah's truck turnaround times and build a stronger communications network between the authority and its customers.

A second will involve the development of a new port access system and a third will monitor port equipment to provide constant, real-time location of containers.

"Different groups and partnerships play a role in maritime logistics, making the supply chain very complex," says Mr Siplon. "You have to be able to segment the chain and deal with specific challenges and issues.

"We have started by looking at some of the issues on the land side. From there, we will eventually move on to other segments such as vessel operations.

"Over the years those developments will dovetail together and begin to make a more efficient overall supply chain."

Haralambides adds that he believes shipping lines should take the lead role in integrating maritime logistics chains.

He says: "The carriers can use the competitive advantage they have in controlling ocean transportation, to be much more prominent in integrating the various components of the supply chain rather than leaving this  to others like the non-vessel-operating carriers and third party logistics providers."

Source: Lloyd's List