Innovations, Challenges, and Opportunities to Develop Regional Cooperation for Maritime Logistics

Innovations, Challenges, and Innovations, Challenges, and Opportunities to Develop Opportunities to Develop Regional Cooperation for Regional Cooperation for

Maritime LogisticsMaritime Logistics

Dr. Lalith Edirisinghe, PhD

Presentation agenda

1. Introduction2. Maritime Industry And World Trade3. Global Perception on Logistics

Performance4. Challenges5. Opportunities6. Innovations7. Regional Cooperation in Maritime

Logistics8. Conclusions

2CINEC Maritime Campus- Malabe, Trincomalee, Jaffna

Introduction

Maritime LogisticsThe concept of integration, be it physical ,

economic/strategic or organizational as an ongoing attempt to create greater value for shareholders

(Panayides & Song, 2015)

Revolves around, Intermodal or Multimodal,vertical integration, governance structure,

relational, people and process integration across organizations


Maritime industry and world trade

Shipping is a “derived demand” of world trade

Demand for shipping is derived from the demand of goods between countries

Size of world trade decides the demand for shipping

World Trade Organization (WTO) provides a platform to decide future strategies related to trade


Growth in merchandis

e trade volume by selected country

grouping, 2013–2015 (Percentage change)


Maritime Industry and its Commercial Perspectives

80% of global trade by volume and over 70% of global trade by value

are carried by sea and are handled by ports worldwide

These shares are even higher in the case of developing countries

UNCTAD


Maritime Logistics Port Performance

Rank Port 2015 2014 2013 2012 2011 1 Shanghai, China 36.54 35.29 33.62 32.53 31.742 Singapore 30.92 33.87 32.6 31.65 29.946 Busan, South Korea 19.45 18.65 17.69 17.04 16.189 Jebel Ali, Dubai, United

Arab Emirates15.60 15.25 13.64 13.30 13.00

12 Port Klang, Malaysia 11.89 10.95 10.35 10.00 9.6017 Tanjung Pelepas, Malaysia 9.10 8.50 7.63 7.70 7.5020 Keihin Ports, Japan 7.52 7.85 7.81 7.85 7.6422 Laem Chabang, Thailand 6.82 6.58 6.04 5.93 5.7326 Ho Chi Minh, Vietnam 5.31 6.39 5.96 5.19 4.5327 Tanjung Priok, Jakarta,

Indonesia5.20 5.77 5.47 5.53 5.50

28 Colombo, Sri Lanka 5.19 4.91 4.31 4.26 4.2634 Jawaharlal Nehru, India 4.49 4.45 4.12 4.26 4.3235 Manila, Philippines 4.23 3.65 3.77 3.71 3.46

Top 50 World Container Ports (Volume in TEU Millions -Selected ports)


"Shipping: Indispensab

le to the world"

A single ship can carry enough grain to feed nearly four million people for a month;

another, enough oil to heat an entire city for a year,

and others can carry the same amount of finished goods as nearly 20,000 heavy trucks on the road.

International Maritime Organization


Global Perception

(LPI)Source: The World Bank South Asia’s world rank in the

Logistics Performance Indicator (LPI)

Connecting to Compete -LPI results across four editions 2010, 2012, 2014, and 2016 (No. of countries evaluated

167)


Port of ColomboActual Performance (Containers)

Type 2011 2012 2013 2014 2015 2016 TransshipmentTEUs

Laden 2766086

2717246

2855514

3278475

3395328

3873272

Empty 357742

347521

352603

421235

492993

481989

Sub total

3123828

3064767

3208117

3699710

3888321

4355261

Total handlingTEUs (Domestic +Transshipment + Re-stow)

Laden 3561674

3490696

3625098

4098284

4269749

4820622

Empty 701213

696424

681108

809631

915718

914301

Total 4262887

4187120

4306206

4907915

5185467

5734923

Transshipment as a % of total 73% 73% 74% 75% 75% 76%Empty as a % of Total 16% 17% 16% 16% 18% 16%

CINEC Maritime Campus- Malabe, Trincomalee, Jaffna 10

Sri Lanka: the preferred hub in South Asia

Deviation Time in Vessel Fuel Cost Port Access Cost of Total Port Time Port Deviation Time ($)*** Charges time in Marginal

(Days*) Cost ($)*** ($)*** Port ($)** Cost ($)Chennai 1.10 1.00 24,750 18,840 28,000 22,500 93,730

Chiitagong 2.25 1.00 50,625 37,800 22,500 22,500 130,925Cochin 0.13 1.00 2,925 2,184 22,500 22,500 56,109

Colombo 0.06 1.00 1,350 1,006 10,000 22,500 34,858Dubai 2.37 0.50 53,325 39,816 5,500 11,250 109,891

JNPT / NSICT 0.85 1.00 19,125 14,280 26,500 22,500 82,405Karachi 1.33 1.00 29,925 22,344 20,000 22,500 94,769Mundra 1.30 1.00 29,950 21,840 28,000 22,500 101,590

Tuticorin 0.09 1.00 2,025 1,512 33,500 22,500 59,537Notes : All figures in US$ * At 23 Knots, ** At US$ 22,500 per day for a 4,000 TEU vessel *** At 120 tpd

x US$ 140/t{Source: Drewry Shipping Consultants Ltd/SAGT)

Competitive Port Terminal Facilities


Challenges

1. Low demand and oversupply2. Security threat3. Environmental regulations

Maritime transport emits around 1000m tonnes of CO2 annually

This accounts 2.5% of global greenhouse gas emissions4. Global shortfall of competent workforce in maritime

sector and declining demand for freshers World fleet is registered in over 150 nations Manned by more than a million seafarers of virtually

every nationality5. The container inventory imbalance costs USD 15

Billion a year globally20% of containers transported by sea and 40% by land are empty

6. Alliances and M&As


Challenges specific to Sri Lanka

1. Volatility of Freight (being the last loading port E/W and oversupply)

2. Ever increasing Empty Reposition Cost in Sri Lanka over USD 100 Million a year

3. Deteriorated vessel deployments for Sri Lankan Cadets

4. Heavy dependency on Transhipments Currently, over 27.4% of India's

export/import cargo is transhipped at foreign ports

Sri Lanka depends on transhipment volumes of Indian t/s cargo

The Indian Cabotage rules allow the foreignflagged vessels to carry cargo only if

Indian flagged vessels are not available


Opportunities

Source: www.containersindia.in (2016)

'Strengthening Maritime Cooperation for a Peaceful, Stable and Prosperous Indian Ocean'.

Indian Ocean Rim Association (IORA)


Trade Agreements: the Key to Booming Maritime Logistics

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Sri Lanka Participation in Goods and Services RTAs

CINEC Maritime Campus- Malabe, Trincomalee, Jaffna

Ownership of World fleet:the Regional Strength

Source: UNCTAD secretariat calculations, based on data from Clarksons Research.

Note: Propelled seagoing merchant vessels of 1,000 gross tons and above, as at 1 JanuaryCINEC Maritime Campus- Malabe,

Trincomalee, Jaffna

Opportunities for Regional Cooperation

1. The region is showing greater opportunities for shipping and logistics businesses

2. One Belt- One Road Initiative India High-speed rail cooperation; industrial parks, Gujarat and Maharashtra Pakistan China–Pakistan economic corridor roads and railway port upgrades, including airport power plant and roads

3. Sri Lanka Deepwater port in Hambantota 4. China Merchants Holdings International investment in Port of

Colombo Source: The Maritime Transport Review- 2016


Regional Cooperation to Improve Occupational Standards

IORA team inspecting Port Patrick- in Sydney Australia

Sri Lankan representatives of IORA Port Occupational project in the SL High commission office in Canberra to brief the project development

The members of IORA Port Occupational project in port of Colombo

2015

Team visiting the “Ship in Campus” at CINEC –Malabe- Sri Lanka

2016


Carrier Centred Approach that leads to Regional Cooperation

Virtual Container Pool -VCP

®

The Concept of Virtual Container Pool –VCP is created by the Author and Developed by Dalian Maritime University and CINEC Maritime Campus. All

Rights Reserved.

®

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Container Exchange Mathematical Model

Innovations and the way forward

Shipboard Autonomous Fire Fighting Robot

Hull Cleaning Robots

This can be guided by smartphone or tablet. 20CINEC Maritime Campus- Malabe, Trincomalee, Jaffna


Anti-Piracy Robots

Robot Ship Inspectors

A robotic unmanned surface vehicle (USV) developed by US Navy

Unmanned robotic vessels can help to fight piracy as well for which researches are going on.



Marine Traffic Automatic Identification SystemTransmits position, speed, and course from the vessel and satellite tracking capabilities for these ships out of range.

Holland Container Innovations-4FOLD

SkySails drive for cargo ships22CINEC Maritime Campus- Malabe,

Trincomalee, Jaffna

Presentation summary

1. World Trade influence on Maritime Industry

2. Global Logistics Ranking for South Asia 3. Challenges, Opportunities, and

Innovations in Maritime Logistics4. Develop Regional Cooperation to

overcome barriers Comparatively greater population in the

Region IORA -Capacity building WTO RTA– Increase trading within the region Ownership of World fleet Virtual Container Pool -VCP


®

Credits:1.International Maritime Organization2.The World Bank3.World Shipping Council4.Indian Ocean Rim Association5.Ceylon Association of Shipping Agents6.Sri Lanka Ports Authority7.CINEC Maritime Campus8.Dalian Maritime University9.www.marineinsight.com10.www.pridel.com11.www.containersindia.in 12.D.-W Song, & P. Panayides


Innovations, Challenges, and Opportunities to Develop Regional Cooperation for Maritime Logistics

Education

Transcript of Innovations, Challenges, and Opportunities to Develop Regional Cooperation for Maritime Logistics