Technologies in Shipping and Port Management - Essay Example

 Technologies in Shipping and Port Management In this chapter, on one hand, the writer examines some changes around the ships and port, and more and more technologies that are being used in transport processes such as the EDI system, RFID. On the other hand, the case study focuses on the reasons that the seaport of Singapore is a success, as it is one of the most important seaports in international shipping. 3.1 The technologic and technologies in shipping and port management Figure 3.1 World Seaborne Traffic (MOL, online) Figure 3.2 International Seaborne Trades for Selected Years ( UNCTAD, online) Just as the figures shows, the seaborne speedy development, nowadays, more than 90% of goods that are traded worldwide are done through the international shipping industry. Without the aid of the shipping industry, it would be very difficult to transport goods worldwide on the necessary, demanded scale. 3.11 The changing in ships After the World War II, various countries well into the period of economic and world seaborne traffic rapidly grew. The ships are changing to meet the demands; at first, ships simply became larger in size, which only pertained to ships that were already larger than other ships, such as tankers and bulk carriers. Nowadays, the bulk carriers are the biggest workers of the fleet, transporting raw materials such as iron ore and coal (Shipping Facts, 2010). Tankers are useful in transporting crude oil, potentially hazardous chemicals and petroleum products. Tankers often look quite the same as bulk carriers, but the deck of the tankers are usually flushed and covered by oil pipe and ventilation systems (Shipping Facts, 2010). In the same period, a further potential design was intended to revolutionise the transfer of cargo on land as well as on the ocean, and this design was the freight container. The idea, which had been first developed in the United States during the 1950s, was to pack cargo into rectangular metal boxes, which could be transported by road, railway or ship (Overview of Shipping and Navigation history, 2010). Now container ships, which carry most of the world's manufactured goods and products, are usually done through scheduled liner services (Shipping Facts, 2010). With the exception of the aforementioned ships, there are two other types of ships that are popular in shipping, one of which are ferries, which usually fulfil shorter trips for a mixture of passengers and commercial vehicles. Most of these ships are Ro-Ro (roll on - roll off) ferries, where allow vehicles to drive straight on and off, making it a speedy and easily accessible way to travel. The other type of ship is known as a specialist ship. This ship deals with the handling of anchors and the suppling of vessels for the offshore oil industry, salvage tugs, ice breakers and research vessels (Shipping Facts, 2010). Table 3.3 Significant Developments and Specialisations since WWII (Alderton, 1999): Date Details 1949 First ship with bulk sugar, the Bara Haig, arrives in London with 5073 tons 1952 Flush weather tight tweendeck covers-steel weatherdeck hatches commonplace 1954 Lloyd’s Register assign a class for ore-carries 1955 Introduction of car carriers 1969 First purpose-built international trading container ship. Sulphur tankers, phosphoric acid tankers 1976 First Semi-submersible 1985 First Fruit Juice Carrier 1986 Hatchless design in Australia There are equally radical changes in regard to the equipment on ships; most of the vital changes took place in the communications field. The younger years of the 20th century brought about the invention of the radio, which aided in transforming communications at sea. Another communication skill is the Morse code that was utilized to pass along a distress message, which was introduced towards the end of the twentieth century and is currently being used by people today, especially in sudden emergencies. But there are some disadvantages with Morse code. The communications technology can only be used for close-contact and the skill cannot transmit the human voice. Then in 1970, the first satellites were sent into orbit in outer space and their benefits to shipping were quickly acknowledged. Maritime radio during that time only consisted of medium waves, but the radio can cover 200 miles. In the beginning, before GPS was invented, was Transit, which is a specialized system that was created by the Navy during the early 1960s to help submarines and ships in the USA navigate. Until 1993, the GPS was used for civilians in the US and internationally, but now the GPS is popular in all kinds of industries. In fact “the Global Positioning System is a network of 27 satellites that orbit the Earth. In addition, GPS can provide the coordinates of any location on the planet, accurate timing, and velocity information. This allows for GPS to be a very valuable instrument in a variety of applications” (Theiss et al, 2004). The Global Positioning System is now an indispensable tool in logistics. Cargo ships that are capable of storing large containers must be able to manage their space in an organized manner. The software that is used to find out the precise location of the shipping container that is being raised by the crane. However, the system is accurate up to a few centimetres. Being useful in other ways, the Global Positioning System can save money and improve efficiency. “In the transport process, GPS is being used for real-time tracking of distribution companies” (Theiss et al, 2004). Since the events of September eleventh, the international community has paid escalating attention to the probably security threats to international trade and transport systems, and has been exceedingly on alert to the need to improve shipping transport security (Lun et al, 2008). Literature in regard to transport has long since started to scrutinize the security of container transport and the implementation of special technology and accounting. Koch (2005) pointed out three technologies that are capable of being distributed to support container transport chains to help increase the security of container, and these technologies are radio frequency identification technology (RFID), smart box initiative and non-intrusive inspection (NII). Radio frequency identification technology (RFID) Angeles (2005) said to consider the following: “RFID is one type of auto-identification technology that uses radio waves to identify individual physical objects. In this article, however, the term ‘auto-ID’ refers to a specific technology prototype developed by the Auto-ID centre at the Massachusetts Institute of Technology and allied research universities”. In ocean transportation, Auto-IDs will help operations to run smoothly in shipping operations as loaders are able to transport cases and pallets quickly and without conflict onto trailers that have been exempt from the need to scan the goods. The conveyors are also able to run at powerful speeds due to the expanded read-speeds of RFIDs and the extinguishing of laser barcode technology that involves line-of-sight readings. The system can also produce the required shipping documents that are becoming progressively more error-free (Angeles, 2005). Smart Box Initiative One of the most important key factors of the Container Security Initiative (CSI) is the application of smart containers that can help to improve the protected containerized shipping. A smart container is paired with an internationally approved mechanical seal fastened to a different location on the container with an electronic container security device (CSD) created specifically to distinguish and halt the interference of the container door. It also yields information on what is being transported in the containers, as well as the exporters’ shipping patterns to identify inconsistencies, allowing them to raise flags of warning as soon as things begin to happen (Barling, 2005 and Lun et al, 2008). Non-intrusive Inspection (NII) One of the biggest concerns in regard to security is the possible use of a container to transport nuclear and radiological substances and devices, such as those used in the creation of explosive devices. As a result, Customs and Border Protection (CBP) uses large-scale X-ray and gamma-ray non-intrusive container inspection (NII) and radioactive sensor systems to screen safely and methodically the conveyance of contraband, such as weapons of mass destruction and radioactive substances (Lun et al, 2008). NII technologies are always used in the inspection of containers of some seaport operations. 3.1.2. Port Development A port is considered to be a specific location where goods are transported from one mode of transport to another mode of transport. In an era of economic globalization, ports are increasingly growing from being traditional land and sea interfaces to providers of completely functional logistics networks (The port industry, 2010). Even more in the development of ocean transportation, not only have the ships been changed to meet the demands of the economic growth, but also the ports have been undergoing drastic changes since 1950. In most cases, specialised ship types will require specialised terminal facilities to handle and store the cargo. It may require special additions to the dock architecture. For example, in Rotterdam the large pure car and truck carriers with their high superstructure became very difficult to manoeuvre in certain areas of the port in cross winds. To conquer this complication the Port of Rotterdam had to create an elaborate windbreak system along the side of a dock entrance (Alderton, 1999). In order to match the development of international shipping, Rotterdam had to large-scale land reclamation. Schrijnen (2003) introduced: “from1950 onwards, the Botlek area began to take shape, followed in the 1960s by Europoort. In the early 1970s, this setting was moulded into the present port territory, through the creation of the first Maasvlakte.” Nowadays, the port of Rotterdam is 40 km long, 10 km wide, accommodates 30,000 oceangoing ships and 130,000 river ships each year. It has 2,000 hectares of basins for a total of 10,500 hectares, including warehousing and industrial areas. In 2006, the port handled 378 million tons of freight, including 9.2 million TEUs of container traffic. These figures make Rotterdam the third most important bulk port in the world, as well as the 6th largest container port (Evolution of the Port of Rotterdam, 1400-2030, online). Despite the advantages in geographical structure, there is another reason for the success of the port. In Medda and Carbonaro (2007), it is stated that Rotterdam is distinctive by powerful economic and social relationships and have an influence upon its region; ports and regions have a relation with each other, and each helps to supply the development and growth of the other”. Now the port cluster population consists of some 2,000 firms generating 61,000 jobs, which includes transport intermediaries, shipping lines, container repair firms, inland shipping and road freight transport firms, more chemical production firms, cargo handling firms and trading firms (Pinder et al, 2004). Figure 3.2 the phases of development of the port of Rotterdam (Evolution of the Port of Rotterdam, 1400-2030, online) During the past two decades, the maritime industry has witnessed the growth of one of the most vital patterns in port community history: the growing use of sophisticated computers. These computers and electronic communications have constructed applications in the port and transport industries, business sectors have become a major beneficiaries (Burt, 1996 and Kia et al, 2000). Firstly is the electronic data interchange (EDI), which Garstone (1995) said that numerous divisions of the shipping and containerization industries viewed the electronic data interchange (EDI) as common technology for the communication of the majority of this important, sensitive information. The creation of EDI criterion was closely overseen by the industry and a message development group was planted early on in the life of the EDI Association to deliberate new Electronic Data Interchange for Administration, Commerce and Transportation criterion for the shipping industry”. Compared to the older method of data exchange, EDI is now decreasing time, getting entirely rid of the re-keying process, minimizing the amount of errors and employing the most up-to-date information available at any given time. The latest information from one port has the ability to be sent by EDI directly into the computer system of the following port (Garstone 1995). However, as each port is based on EDI theory, they are designed and use different data transition system. As suggested by Yu and Zhang (2009, P161): In the seaport of Rotterdam, the INTIS (International Transport Information System) are EDI services, which have been designed in order to meet the rapid development of trade and transportation in Dutch in 1985. In France, the Customs Committee proposed the establishment of the SOFI system to keep abreast of the goods at the terminal and the freight yard of the shipment information in the Le Havre in 1982 and after one year, the ADEMAR (Automated Customs Clearance of Goods) designed the first EDI system and connection with SOFT system. And now, function has been increasing in ADEMAR, being upgraded to ADEMAR +. The ADEMAR + system can ensure full automation from the goods into port and then leave. In the UK, it is also established, though the EDI system is called the CNS. Then, as Kia et al (2000) pointed out that the system is called ‘prime mover tracking system’ (PMTS) because it allows the terminal supervisor to keep an eye on the closed containers at any given moment in time while the containers are in whichever terminal they are currently in. The PMTS also allows the operator to follow the containers and send back the current location of the containers to the central information system where the information can then be checked. Any dissimilarities between the commanded and the actual location of the container can be quickly noticed when the operator activates the twist lock. 3.2.3 New Harmony of Shipping and Ports in the 21st Century Whenever the old problems were resolved, new problems would arise. This situation occurred in the shipping and ports development. Ocean transportation is the smallest environmentally destructive form of commercial transportation but there has been a noticeable decrease in marine pollution over the last two decades or so, especially in concern to the amount of oil that has been leaked or spilled into the sea, even though there has a large increase in world seaborne trade (Environmental Performance, 2010) and some air pollution closely related to the issue of climate change. The pollution formed from shipping includes: exhaust emission, garbage, and oil. Exhaust emission from diesel engines is currently the major provider of propulsive power in the marine industry. Gas pollution is unavoidable, which consists of carbon dioxide (CO2), water vapour, oxides of nitrogen and oxides of sulphur (Pinder et al, 2004). These gases are the main reasons of climate change. So, more and more people and relevant organizations are working on reducing greenhouse gas emissions. Improving the fuel oil quality supplied to ships is another key mission by the oil companies in the future, particularly the sulphur content of which is relatively high (Atmospheric pollution, 2010). In recent years, people always hear or make note of some news or other about the marine oil spill. An oil spill consisting of a few hundred gallons in a river is a grave situation and can damage not only the environment but businesses as well, especially those that require the use of the ocean. Zollitsch (2009) stated that Damage to the environment due to oil spills can be crucial. As per example, if a spill were to take place in the Columbia River, fast currents and the tidal flux of Oregon’s estuaries would mean that the oil would spread just as quickly if not immediately suppressed. A large selection of vulnerable ocean life and waterfowl, as well as huge portions of delicate habitats, could be grimly effected. In commerce, the oil spill cleanup costs are costliness, as the costs are levied on oil type, the length to the shoreline, location, cleanup methodology, and spill size. As an illustration: the costs standard of Oregon, which established in 1991 and revising in 2007: Figure 3.3 Costs of Clean up Oil Spill Cargo Vessels per trip $70 Tank Barge per trip 25,000 bbls - 100,000 bbls $100 Dredges (per day) $36 Tank Vessel per trip $1,200 Facility (annual) $5,900 (Zollitsch, 2009) 3.3 The Case Study of Singapore Port Mode. The last news showed “Singapore has been named Best Seaport in Asia for the 21st time. Singapore port was announced the winner at the 23rd Asian Freight and Supply Chain Awards (AFSCA) on Wednesday. In 2009, Singapore's maritime and port sector saw record volumes in vessel arrival tonnage, container throughput, and bunker sales. Vessel arrivals reached 1.6 billion gross tonnes, rose 11.1% from 2007. Container traffic grew by 7.1% to be 29.9 million TEUs. Bunker sales volume set a new record by 34.9 million metric tonnes (mt), up 10.8% from 2007” (Port World, online). Reason of Success on Port of Singapore The number of elements contributing to the success of the port of Singapore to a transhipment hub are as follows: strategic location, high level of operational efficiency, wide range of port service and IT or connectivity skill support (Lee and Cullinance, 2005). 1.1 Strategic Location The Port of Singapore has an enviable position as one the busiest container ports in the world. “Singapore is located at the tip of the Malay Peninsula at the narrowest point of the Strait of Malacca, which is the shortest sea route between India and China. Its major natural resources are its location and its deep-water harbour” (Lepoer, 1989). Moreover, Singapore is the maritime traffic to connect the Indian and Pacific oceans. The natural deep waters and harbours are the biggest advantages in the development of Singapore, because they are able to service ships with deeper draughts without necessarily resorting to extensive and expensive dredging operations. A view of Lee and Cullinance (2005) claim that the water route is capable of giving access to Singapore, allowing even the largest of ships to access them. Singapore also is not hampered by typhoons and other natural destructive weather, which makes port operations and freight movements safe and convenient. The location of Singapore is easily connected to parts of the world’s active economies such as Malaysia, China, Japan and South Korea; some call Singapore the gateway in Asia. The recent remarkable economic development and growing trade orientation of its close Asia neighbours have only heightened its role as a transhipment centre port. 1.2 the High Level of Operational Efficiency Even though there are obvious significances of port efficiency, identifying port efficiency tends to be a difficult task. Numberless amount of aspects can impact the efficiency of a port. “Some of the more notable key principles include dock facilities, connections to rail and trucking lines, harbour characteristics time to clear customs, and labour relations” (Blonigen and Wilson, 2007). However, in the normal port efficiency of port service, there is speed and reliability. Speed is easy to understand, according to a survey conducted for UNCTED (1992), which states that ‘on time delivery’ was cited to be a major concern by most shippers (Lee and Cullinance, 2005). For reliability, there needs to be a constant and expected rendering that can be implemented to the schedules of shipping lines. If a port authority or operator continues to create hindrances during the processes of operation because of strikes, dysfunctional equipment, or weather, then shipping companies and shippers will be troubled with massive losses (Tongzon, and Heng, 2005). In Singapore, the Maritime and Port Authority (MPA) ensures that the port of Singapore remains safe, secure and clean while maintaining a high level of reliability, speed and efficiency in its operations (MPA, online). In 1999, Yongzon used a mathematical programming technique known as a data envelopment analysis (DEA) to measure the port of Singapore’s overall level of efficiency compared to other major ports in the world. Just as the data shows, the Singapore port with a high level of efficiency is relative to other major ports. Figure Relative Efficiency Rankings Using DEA (Selection) Ports Additive CCR 1 Melbourne 0.6954 0.4383 2 Sydney 1.0000 1.0000 3 Rotterdam 0.7116 0.5697 4 Le Havre 1.0000 0.4219 5 Singapore 1.0000 1.0000 Notes: the CCR is the Charnes, Cooper and Rhodes DEA method. Additive is the additive DEA model of Charnes et al.(1985). A score of 1 indicates that the port is efficient. (Lee and Cullinance, 2005). The Technologies in Seaport The information technology is indispensable to economic processes in the 21st century and information technology is applied increasingly in the area of logistics. With the increasing trade, maritime transport of goods are also increasing, in order to guarantee the normal operation of ports, towards automation of terminal operations from in/out gates to ship-side in port. Nowadays, paying attention to the use of technologies is one of the reasons of success, just as can be seen with the Singaporean port. Focusing on Singapore’s seaport as the world's most involved port, the Port of Singapore Authority is there to make sure that ships that are arriving in Singapore are quickly and properly taken care of. The systems that have been developed by the IS group are now quite popular among port users. Aside from tending to the demands of PSA's users, these systems aid the shipping community to be more increasingly efficient and beneficial when it comes to logistics and port operations. Information systems used in port serve the needs of PSA's users. These systems help the shipping community users to be more efficient and effective in the logistics and port operations (Lee-Partridge et al, 2000). There is another system called FastConnect in the Singapore hub port, which helps to lessen the time-gap for supporting the connections needed for transhipment of containers. Accounting to Lee-Partridge et al (2000), when connected with FastConnect, the intra-terminal correspondence amidst the first carriers and pier of a second carrier have been significantly minimized from eight hours to two hours. For inter-terminal connections, the time has been minimized to ten hours from twelve hours. Since transhipment is a vital trade for the Singapore Port, FastConnect is the most beneficial move towards just-in-time connections. Until now, PSA has had the capability to support the IT to continue being competitive through having a business-driven IT development, aligning business and IS plans, maintaining a flexible and extensible IT infrastructure and encouraging creativity and innovation among its IT personnel. The Wide Range of Services There is wide range of port services in Singapore’s port. Over time, it has built a high performance distribution system, such as the rest of the shippers’ logistics channel, and the material flow in manufacturing plants. The port also built a suite of ship-related and port-related services such as bunkering, ship repair, storage and others (Lee and Cullinance, 2005). Beside these, Lee and Cullinance (2005) pointed out that Singapore is also as a centre that contains warehouses and distribution facilities for international use. It is the distribution of goods to the rest of Southeast Asia for the strategic location and its liberal trading environment. CHAPTER 4 METHOD In this chapter, the aim is to discuss and justify the methods that are always used in dissertations and which one or several were used in this research and why. At the same time, I will be taking into account the associated limitations and ethical considerations. It provides a detailed analysis of exactly what has been accomplished, why and how, and it provides some observations on the experience. 4.1 Primary Research Primary research is the first occurrence of a piece of work. It includes issued references such as reports, a few central and local government works, as well as planning documents. Also included is unpublished manuscript resources, such as letters, memos and interviews (Saunders et al, 2000). 4.1.1. Advantages of Primary Research Ghauri & GrØnhaug (2002 p81) state that the main advantage of primary data is that the information is obtained for the specific project being done. What this means is that the researchers are more stable with the research questions and goals. Primary data is also up-to-date, as opposed to most secondary data. 4.1.2. Limitations of Primary Research The main disadvantage is that primary data can take a long time to gather and it tends to be tedious to gain entry to the target groups to respond to questions. Ghauri & GrØnhaug (2002, p82) state another disadvantage is “that the researcher needs to be careful in using proper tools, procedures and methods of analysis, as otherwise s/he will jeopardize the reliability and applicability of the study.” There is also the limitation of the writer being contingent on the readiness and cooperation of the respondents, who could be reluctant to take part due to lack of time, interest or possible negative ramifications if they provide honest answers. 4.2 Secondary Research Secondary Data is data that has already been done from previous work or research. Secondary data makes up the main supply of data for a research project. It comprises of written documents such as books, journal articles, magazine, newspapers and official reports. It also includes other means of information such as video, picture, film, TV programmes or audio recordings (Saunders et al, 2000). In this part, there will be a brief overview of advantages and limitations by secondary analysis. This is succeeded by a discussion of when it is appropriate to use secondary analysis of qualitative data. Finally, the article concludes with ethical considerations and reasons for choosing secondary analysis. 4.2 .1. Advantages of Secondary Research In Sarensen H T et al (1996), it was stated that the biggest perk of using secondary information sources is that they already exist, having been discovered previously by others; time spent on the actual research is more likely to take less time then on researching that requires the use of primary information. Furthermore, the costs of the project are reduced markedly, as is the waste of data, compared with the collection of primary data. Other advantages include the size of the sample, its representativeness, and the reduced likelihood of bias due to, for example, recall, non-response and effect on the diagnostic process of attention caused by the research question. The cost-effectiveness and convenience are also some of the most important benefits about the using secondary data sources (Szabo et al, 1997). Additionally, secondary analysts have the chance to look at the information set with a dispassion that may be tough to achieve by the first researcher. For example, in this study the secondary data displayed ideas for additional study on both the original and secondary questions. These advantages of using secondary analysis contribute to its potential as a useful method for this dissertation. Secondary data played an important role in contributing to the researcher a great amount of data about the international shipping and seaport management. 4.2.2. Limitations of Secondary Analysis In Sarensen H T et al (1996) it is stated: the limitations of secondary data are impossible to be usable or unsuitable, because the selection and quality, as well as the techniques of their collection, which are not under the researcher’s control. In other words, (Szabo et al, 1997) “the method lack of control in generating the data set for the secondary study and the inability to follow strictly the guidelines of the chosen data analysis method. The lack of control may be linked to how a data set was conceived, generated, or recorded, or there may have been problems or biases in the original research”. Secondly, initial principles could influence how information is displayed. Using information that plays a part of the report means that you need to take in account the purpose of what you are reporting and how it will effect the way that the information is displayed. This holds true specifically for internal organisational information and external information such as published company reports and articles from newspaper (Saunders et al, 2000). 4.3. Method The writer has chosen a mixed mode survey, one of which is a Qualitative method analysis of the secondary information set about the technologies in marine transportation; another is using benchmarking views to evaluate the Singapore seaport operation. In Burns and Bush (2006), it has been stated that using a variety of information-collecting methods allows the constructor of the research project to have access to a representative sample of the population. 4.3.1 Qualitative Method Qualitative research is a type of scientific research. Generally speaking, scientific research is composed of an analysis which (Qualitative Research Methods Overview, 2010): • “seeks answers to a question • Systematically uses a predefined set of procedures to answer the question • Collects evidence • Produces findings that were not determined in advance • Produces findings that are applicable beyond the immediate boundaries of the study” (Qualitative Research Methods Overview, 2010) 4.3.2 Benchmarking Measures Benchmarking measures are used to find and analyze the key performance indicator of Singaporean port operation. Benchmarking is an approach to total quality management from Japan, which focuses on improvement services, product and process standards (Oakland, 2001). Oakland (2001) states that “benchmark is a reference or measurement standard used for comparison, and benchmarking is the continuous process of identifying, understanding and adapting best practice and processes that will lead to superior performance”. The reason behind benchmarking can be seen as follows (Zairi et al, 1996): 1. Internally focused, and without a coherent apprehension of their strengths and weaknesses, a reactive approach to competitiveness and a poor knowledge of customers’ true requirements. 2. Being driven externally involves being focused and close to the markets that they work in. They have access to a limitless pool of ideas, use the market as a starting point for setting their objectives and have a very good understanding of customer requirements. In the practice of benchmarking, there are five main stages of benchmarking (Oaklan, 2006): “Plan, it is identifying key performance indicators by benchmarks which will use in the study. Analyse, understand the “enabling process” as well as performance measures. Develop, set new performance level objectives or standards. Improve, implement specific actions and integrate them into the business process. Review, monitor the results and improvements”. However, to focus on the study in this paper, the writer has used just “plan” and “analysis” to the operate mode of Singapore port. 4.5 Ethical Issues Ethical issues to be considered in secondary analysis; firstly, the writer of this research paper is acknowledges the fact that he has no reason to involve children or vulnerable people in his research. Second, in this study, the original consent form included the provision for secondary research and was contingent upon the secondary study receiving approval following ethics regulations. In addition, the secondary analyst is obligated by the consistent confidentiality and privacy limitations as the primary analysts (Szabo et al, 1997). 4.6 Limitations/Constraints of the Research The limitations of the research were fully understood. The basic sample and qualitative and quantitative nature of the study does not supply outcomes that can be generalized to what is taking place in international shipping and the seaport of Singapore. 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