Port Logistics - Term Paper Example

«Port Logistics» Sea transport has for a long time now been a vital cannel for the delivery of goods of different kinds from one point to the other in the UK. Were it not for sea transport, international trade would be struggling since its varied cargo ferrying capacity remains unmatched by other transport systems. It therefore follows that management of the port business is an important area in not only internal but external business operation. Port logistics involve management strategies used by port management and government agencies to ensure efficient goods circulation from their origin to their destination in such a way that satisfies the needs of the customers. Relevant key areas in the shipping industry include the ferrying of the goods in the sea to the destination, then delivery to the final destination. Cargo deliveries here have a global tag and the importance of international business can only be handled with strict caution that it deserves to ensure tapping of its benefits. Port systems must put in place the various improvement strategies targeting various stages of the shipping business. Geographic relationship between the port and the two destinations must be assessed and relevant compensational optimization considered where proximity issues arise. The case of the UK in compensation costs is relatively advantageous. Delivery and legal infrastructure must be ensured for cargo movement from the port to the destination. Conformation with the legal provisions as well as adherence to international routine practices may be affected by the manner in which the management plans for its operations. The network of delivery of goods must be convenient to the customer who is the most important stakeholder in the business. This implies that the flow of the goods must be continuous at all the time (Goodman 1984, p238). Geographic Location of Ports In Britain, the management of the biggest port services occurs at Humber Estuary Services (HES), operating more than 21 ports. This implies that the services at the HES have a direct influence on almost the entire country’s port system. There are several factors that influence port development, one of them being the geographic location of the port. An advantage is rendered to those ports that are located near maritime access routes and networks for easy access to international sea waters. At the same time, the connectivity with the inland infrastructure and proximity to the relevant business destinations on the mainland must be considered. According to Fleming and Hayuth (1994, p188), these two geographic factors can be denoted as intermediacy and centrality, regarding the sea and hinterland proximity respectively. These conditions can be translated to mean the following during port design. First, when both conditions are met, the success rate of the port can be rated high assuming that the relevant infrastructure being availed. Secondly, where one condition is met and the other is not, compensation measures aimed at maximizing on one of them are enhanced. The term used to relate the apparent disparity in meeting both conditions is peripheral. For instance peripheral to shipping lanes where the strategic location on the sea waters is met while peripheral to land markets refers to hinterland proximity. International or overseas market is alternatively used to refer to shipping connectivity. Finally, where a particular port lacks both conditions, it is predicted that their implications on free shipping is going to adversely be affected. At Humber Ports, the two factors are two factors can be said to fall in the first category hence make it easy for the management to highlight other problems elsewhere. Port management strategies and logistics attempt to offer solutions to how peripheral issues are to be addressed in order to overcome the limitations thereon. At Humber Ports, short sea shipping is utilized in the region for the good connectivity between the ports, which enjoy both centrality and intermediacy. Access to a port is generally determined by some factors which include the geography, weather, great circle routes as well as world choke points which heavily influence the movement of vessels. Costs of infrastructure to access the port must be in consideration of the traffic to and from the port. Intermediacy is rarely changed by way of creating channels to reach a certain point for port location. But intermediacy can be easily enhanced to allow access to a port from the hinterland. These factors are taken into consideration during infrastructure designs to ensure compensating of costs where one periphery comes into play. It is however very important to ensure that the hinterland access is not compromised since shipping deliveries must ultimately reach the mainland. In the UK, optimization of the inland connectivity through cooperation and coordination may offer solutions to possible system weaknesses. Port management entails economic strategies, supply and distribution which need a well coordinated network which reduces operational costs as well as maximize returns (Cullinane and Talley, 2006, p6). The role of management at the port is to ensure that the cargo arriving at the port continues with the journey to the customers without delay. The global picture of sea business has extra responsibilities on the management that aim at connecting international communities through trade interactions. It is the responsibility of the management to ensure that internal supply chain is enhanced. Coordination aimed at promoting supply activities is enhanced by strict routine procedures at the port to reduce congestion. The management can introduce such measures as introduction of incentives such as bonuses. On the other hand, rules and regulations can be introduced to reduce congestion such as penalties. Inter-firm alliances can be enhanced to promote supply activities by setting joint products and packages for delivery. The port design is also determined by the channel width and port entrance geography. The consideration of the width takes into account the size of ship accessing the port which should reduce time taken by the traffic. The depth of the channel must accommodate the size of the vessels accessing the port. The port area should ensure free stopping as well as vessel swinging. The port design takes into consideration the relevant space required by equipment. Examples of port equipment units include cargo cranes, container cranes, garb cranes, rubber tyred cranes, specialized unloading systems, rail and tyred transtainers, floating cranes, terminal trailers, floating docks, industrial travelifts, overhead gantry cranes, shipyard cranes and trailers, pedestal cranes, shiplift and syncrolift. Port designers takes into consideration the space required by the equipment at the port, to ensure that the space is sufficient even for expansion (Cullinane, 2002, p430). At Humber Sea Terminal, creation of a drainage solution to handle underground and storm water enhances the operation of the port since the Humber Estuary faces frequent storms. The created drainage stabilizes the port, since the natural geographic topology can not allow such port operation. The height of the port structures must accommodate the vessel. Vessel selection is determined largely by crane dimensions, restrictions of port to vessel loading and discharge as well as the vessel availability. To reduce the cost of transportation of the goods from the port to the destination involves a network that requires clear coordination and cooperation of the role players. Inter-port relationships are aimed at reducing costs incurred during proximity compensation. Increased transport volumes to the inland terminals for delivery can be enhanced if the ports cooperate. Resources use is maximized through networking for scope and scale of operation, improving competency and promote advantage gained at a particular competition level. Projection of berths in to the sea may be necessitated where the harbor is not deep enough to allow vessels to dock without problems. The topography at Humber Sea Terminal requires creation of such berths due to the shallow grounds around the Humber Estuary. Vessel Types and Ports Ports in United Kingdom include: Grimsby and Immingham, Hull, Rivers Hull & Humber, Goole and River Trent. Vessel types to access a certain port are determined by the vessel size that the port can allow. When capacity shortage occurs at the port, the management may be force to neglect large capacity vessels which is disadvantageous to the port, both in revenues and image to the customers. The initial terminal design should be in anticipation of a wide variety of vessels, which implies that future development of the port should be considered. There are several vessels in UK ports and each vessel is designed for a specific purpose. The first category of vessels is special purpose vessel. This type of vessel has subcategories which include cutter dredger, heavy cargo, cable layer, rock dumping vessel, suction hopper dredger and mining vessels. Cutter dredger vessel is specifically designed for excavation in hard soils and superficial water. Heavy cargo vessel is further subdivided into: semi-submersible heavy lift ship which is used to lower main cargo deck below the water line to enable loading on and off of the drilling rig, conventional heavy lift ship, tow barges and dockships Rock dumping vessel is used for transport and dumping of rocks of different sizes. Dumping is done with a large crane or by use of vessels such as side stone dumping vessels and flexible fallpipe vessels. These rocks are used for offshore and coastal protection purposes. Suction hopper dredger pulls a suction pipe while working. The suction pipe loads dredge spoils into hoppers in the vessel. This vessel operates in shallow water conditions. Offshore mining activities are done by a mining vessel which is specifically designed for this purpose. Cable layer vessels are made in such a way that they can lay cables in shallow and deep waters. The second category of vessels is cruise and ferry. This category is divided into cruise vessels and ferries. Cruise vessel is used for transport of passengers and its main purpose is entertainment. The ship is able to operate well in varying operational conditions. Ferries are classified into: RoPax which is designed to carry over 12 passengers. Pax which also carries over 12 passengers and in addition it transports cargo, trucks and cars. Ro-Ro is used for delivery of goods between islands and main lands. The third category is inland ship. Inland ships transport goods and passengers on rivers, canals and lakes. They are built in a way that the ships are able to manoeuvre easily in congested waterways. The fourth category of vessels is merchant vessel and work boat. They are divided into: Bulk carrier – its main purpose is carrying of goods of varying capacities. Containers – they are designed to carry containers. Fishing vessels (used for fishing purposes) General cargo (multipurpose vessel able to carry all sorts of containers and cargo), LNG carriers, LPG tankers, Oil tankers, Pilot vessels, Shuttle tankers and Tugs and supply vessels. The fifth category of vessels is navy. It is divided into: aircraft carriers, mine sweepers, patrol vessels, submarines and frigates. Frigates are warship designed according to the mission or task they perform. Sixth category of vessels is the yacht. Bearing the above classification in mind, the size of the vessel that accesses a particular port must be considered when coming up with the port designing. The geographic topology can be favourable for short sea shipping, which implies that the movement of freight is by the means of sea alone from one country to the other. This happens where the continent has a fine connection by sea ports (Lodewijks et al, 2008, p205). Small sea vessels enhance upstream navigation to increase short sea shipping network. Infrastructure Concerning infrastructure for business operations by the port, the geographical location of the port determines the resources to be utilized (ITF et al, 2009, p268). For instance, the location could necessitate extra technical assistance for various areas including security, staffing requirements, equipment, construction and the trade missions to join. Port economics are closely directed by the position of the port. Some compensation costs must be met by the management during the operations of the port since the geographic location demands so. Vessel Traffic Services (VTS) Humber on the Humber River was formulated with an aim of regulating and monitoring the River navigation, to ensure smooth operations. Hinterland distribution regions that are considered in the Humber Ports cover Yorkshire and the Humber region. Hull City Council have the mandate of ensuring that the port capacity is not compromised by congestion occasioned by lack of transport infrastructure to the ports. Among other authorities with the responsibility of ensuring that transport infrastructure does not cripple operations include Councils from North and North East Lincolnshire. The many businesses around the region favour business centrality while the rest of the UK has a good transport network to cover interior of the country. Logistics aimed at maximizing the current capability of the system must tackle delays on the actual transit as well as distribution capacity (Fonseca and Soares, 2006, p65). For instance, the cost of port time occasioned by transport infrastructure insufficiency maybe avoided by putting n place the correct strategies to reduce congestion at the port. Port and inter port connectivity with the overseas market as well as the hinterland determines the cost to be incurred during the actual delivery services. When the management operates at reduced costs of operation, it is practically possible that customers will be attracted to the benefits of lowered shipping costs. Logistics at reducing costs therefore place a lot of importance on the infrastructure availed. It has been argued that improving the infrastructure connectivity and reducing the costs thereon is similar to geographically positioning the port in an ideal location. This implies that efficiency at the port in terms of transport connection networks is a very vital aspect of logistics and strategies to be adopted by the management (Juhel, 2000, pp-11-12). Besides the management issues to position the port as a central hub for not only country’s shipping needs but also regional, legal requirements are very important. Customs systems at the port play a very central role to the general infrastructure and operation framework. Just like transport infrastructure participates in determining the overall efficiency at the port, customs delays must be avoided to ensure increased competitiveness. Strategic positioning analysis (SPA) assesses port competitiveness starting form the legal point of view to the general operations efficiency likely to attract customers to a particular port. The other criteria applied in analyzing the port competitiveness is on the market operation of the port as a business entity. The UK customs regulations have been revised over the years to allow competitiveness for the various ports (Ashar & Kent, 2001, p40). For instance, at the Humber Sea Terminal, it is very easy for the country to perform shipping activities with European Union countries. The compliance standards set at the port to reduce defaulting hence increase competitiveness is enhanced and facilitated by the government. Other private ports are encouraged by the government to cooperate in order to ensure that the customs regulations laid out in the law are adhered to. Marine cargo insurance policies must be procured for eventualities in the sea as well as at the port. The systems at the port should facilitate checking compliance as well as facilitate procurement of the necessary policy and cover. Arrangement for voyage policies which protect the goods in transit from the port to the destination must be made at the port. It is also important to avail possible contingent cargo policies for the shippers. The compliance requirements are always facilitated for the various customers who might not be conversant with the legal regulations of the processes involved. The type of cargo to be ferried by sea also determines the design of the port. When the sea terminal is targeted for container transportation, container handling requirements must be considered at the port and necessary handling equipment availed (Nooteboom 1999, p63). The demand of the container in the hinterland and the availability of the ferrying infrastructure are put into consideration. The supply of the containers from the port to the hinterland necessitates a clear network with capacity to handle the consignments. Deports may be created at an inland location for temporary storage to ease congestion at the port. The supply and demand forces of the market may force a certain pattern to be observed in the chain. Container and consignment arrivals at the port directly determine the flow into the hinterland. Therefore the effective pattern observed is strictly studied and followed to ensure efficiency. Freight distribution is a sensitive area since the nature of the cargo and its delivery urgency may force certain attributes which necessitates prompt delivery arrangements. Conclusion The UK has a good port connectivity which holds a lot of promise if coordination and cooperation can be enhanced beyond the current level. Port locations in the UK are better positioned to enjoy the benefits of centrality and intermediacy at the same time. It can be therefore be predicted that improvement of the port system in the UK will dramatically open up the country as well as offer cheaper solutions to transport problems. References Ashar A. & Kent P. E., (2001). “Port Competition Regulation: A Tool for Monitoring for Anti-Competitive Behaviour”, International Journal of Maritime Economics, vol. 3 no. 1 pp. 27-51 Cullinane K. & Talley W. K., (2006). Research in transportation Economics: Port economics, JAI Press, Oxford, UK. Cullinane K. P. B., (2002). The productivity and efficiency of ports and terminals: methods and applications, Lloyds of London, London Fleming D. & Hayuth Y., (1994). “Concepts of Strategic Commercial Location: The Case of Container Ports”, Maritime Policy and Management, vol. 21 no. 3 pp. 187-193. Fonseca G. N. & Soares C. G., (2006). Maritime transportation and exploitation of ocean and coastal resources, Taylor and Francis Publishers, Lisbon Goodman A. C. (1984). “Port Planning and Financing for Bulk Cargo Ships: Theory and a North American example. Journal of Transport Economics and Policy, vol. 18 no. 1 pp. 237-252 International Transport Forum (ITF), Transport Research Centre (TRC), and Organisation for Economic Cooperation and Development (OCED), (2009). Port competition and hinterland connections, Round Table 143, Viewed 27th September 2010, Juhel M., (2000). “Globalization and Partnerships in Ports: Trends for the 21st Century”, Portsand Harbours, vol. 45 no.1 pp.9–14. Lodewijks G., Ottjes J. A. & Veeke H. P. M., (2008). The Delft systems approach: Analysis and design of industrial systems, Springer-Varlag London Ltd, London Nooteboom B. (1999). Inter-Firm Alliances: Analysis and Design, Routledge Publishers, London Read More