[CHAPTER 8] PORTS AND FACILITIES

PORTS AND FACILITIES

A port is defined as the intersection of different modes of transport

REASONS FOR DISTINGUISHING BETWEEN PORTS AND FACILITIES

v  At a port there are parties other than a shipper or consignee handling the cargo.

v  Different modes of transportation come together at a port.

v  As an intersection, there are different directions in which the cargo can go.

OCEAN PORTS

An ocean port is any place where geography allowed a ship near land where it could safely load cargo.

AIRPORTS

v  It can be said that almost all major airports are run by a public agency usually a local government.

v  The groundside which is what the passengers see, including airline arrival and departure areas such as public parking, the restaurants and more.

v  While the airside is often bigger which is where the airlines operate, the baggage is handled and the cargo moved.

HOW AIRPORT EARN MONEY?

1)   Concessions

2)   Carrier fees which is landing fees

WAREHOUSING

There are two functions in a warehouse which is movement and storage of the cargo.

VALUE-ADDED SERVICES OF A WAREHOUSE

Ø  Dispatch

Ø  Freight unloading

Ø  Forklift service

Ø  Local delivery

Ø  Documentation handling

Ø  After market sales support

FREE TRADE ZONES

Free trade zone which is (FTZ) are not a port and not a warehouse.

PURPOSE OF FREE TRADE ZONE

Ø  Encourage international trade by giving some flexibility in the import rules.

Ø  Allows someone to bring something into the country and as long as it remains in the FTZ, it is not officially imported.

Ø  Some of those things are intended to assist the importer to get the cargo ready for legal import which this help the importer to do his job.

Ø  A way to create local jobs.

ADVANTAGES OF FREE TRADE ZONE

Ø  Government provides the carriers and shippers flexibility. This means without an FTZ any mistake would mean that the cargo be sent out of the country.

Ø  A good way for unstable countries to get some free and fair enterprise  which is mean a foreign companies are often shy of entering an unstable country but an FTZ is usually much safer.

REASONS OF USING FREE TRADE ZONE

1)   Delay tariffs

2)   Avoid tariffs before on shipment

3)   Processing

4)   Correct mistakes

5)   Sell

[Notes] Chapter 7 : Air Transportation

AIR TRANSPORTATION

Air transportation has been the single most significant development in logistics of this century. While other modes of transport are seeing growth resulting from increased international trade, the air cargo is experiencing exceptionally high growth. 

PRIMARY REASONS FOR THE GROWTH IN AIR CARGO:

• -      Deregulation and liberalization of the air cargo industry.
• -      Global interdependence helped by world trade agreements.
• -      International production and sales of goods and services.
• -      New inventory management concepts such as “JIT” and “ZERO” stocks.
• -      New air-eligible commodities.
• -      The vast development of high value and limited time-consumable commodities

 AIRPLANES AND AVIATION EQUIPMENT  

BELLYSPACE

§  This is the space in the belly of a passenger plane, normally used for luggage. About 60% of air cargo moves in luggage compartment. Cargo, unlike luggage, is not accompanied by the sender, more handlers, different and more documentation.

     FLEXBELLY

§  Some planes are basically passenger planes, but the interior can be adjusted to include more or less space for cargo or passengers.

      FREIGHTER

§  This is a plane used just for cargo. Often a passenger plane towards the end of its useful life is converted into a freighter. Freighter planes built just for this purpose normally would not include windows, since there is no need for windows along the body of the plane. 

      TRUCK

§  What many do not realize is that a lot of ‘air cargo’ actually goes by truck. Major airlines have been replacing their large planes with smaller planes for shorter flights. This reduces cargo space available, and thus means air cargo companies need to find a quick alternative. 

MARKETS IN AIR CARGO

  Mail – monopoly market of the official postal service in a given country 

  Express transportation – the speed of the delivery is crucial. The package is promised to be delivered at certain time.

Courier – advance and 10 times more expensive than express service and there is no need to develop tracking services.

 Freight – moves larger package that would be too expensive to be sent through air express.   

FACTORS OF AIR CARGO RATES

  Volume of traffic. – The higher the traffic volume, the cheaper it is to provide service, and thus the service is cheaper.

  Direction of traffic. – While passenger normally travels round trip, cargo does not. Many trade lanes have more traffic going one way than the reverse. 

  Value of the service. – This is determined not just by the airlines, but the needs of the customers.

  Competition. – Carriers cannot avoid the influence of other carriers in determining their rates. 

[Information] TOP 10 LEADING COMPANIES

1. NYK: An acronym for the Japanese shipping company Nippon Yusen Kabushiki Kaisha, the NYK is one of the biggest cargo companies operating internationally

The company has been in operation since the 1870s, operating a passenger fleet-line before undergoing a transition into a core container shipping company towards the mid-20^th century.

2. Evergreen Marine Corporation: A shipping conglomerate based in China, the Evergreen Marine Corporation was founded in 1968 by Dr. Yung-Fa Chang, a visionary in his own right.

At present, the company has offices established all over the world and with a operational capacity of more than 160 container ships is regarded to be one the largest cargo shipping companies in the world.

3. CMA-CGM:  France’s leading container shipping company, CMA-CGM came into existence in the year 1978, as a result of series of mergers between previously established shipping corporations. Jacques Saade who is the head of the company was the instrumental force behind its coming into active operation.

At present, the company has a fleet of over 350 ships operating in over 150 routes globally.

4. Maersk: A shipping corporation based in Denmark, Maersk Shipping Line is a branch of the AP Moller- Maersk company. Widely well-known for its fleet of container ships, the Maersk Line made its debut in the international container shipping arena in the year 1904.

At present, the company has a fleet of around 500 container ships with a capacity of around 19, 00,000 TEU (Twenty-Foot Equivalent Units).

5. MSC: The Mediterranean Shipping Company, abbreviated to MSC is a Swiss international cargo company which was established in the year 1970.

At present, with a vessel line-up of over 456 container ships, the conglomerate is rated to be one of the most extensive cargo companies in the world.

6. Hapag-Lloyd: The German based Hapag-Lloyd is one of the most renowned and well-featured companies in terms of international shipping companies. The company was established in the year 1970 as a result of a merger between the Hamburg-American Line and the North German company Lloyd.

Today the shipping corporation has over 130 ships catering to about five million containers on a worldwide scale.

7. APL: An auxiliary company to the Singaporean Orient Shipping Lines, APL is an abbreviation for American President Lines. Founded in the year 1848, the shipping conglomerate just celebrated its 160^th anniversary in the year 2008.

One of the most noteworthy achievements of the company is that it was the first company to successfully utilise extra-large (53 feet) containers on its vessels, accounting for shorter cargo transportation.

8. COSCO: The China Ocean Shipping Company or COSCO, as it is popularly known is one of the leading conglomerates in terms of container shipping companies.

At present the company’s operations are spread over 40 countries with a fleet of 150 container ships.

9. Hanjin: A South Korean conglomerate, Hanjin Shipping Company is one of the largest Asian cargo companies in the world. At present the company has a cargo operational capacity of over 1 billion tonnes on a yearly basis with around a fleet of about 60 ships.

In the year 2003, Hanjin and COSCO formed a strategic alliance. The alliance has benefited both shipping conglomerates and powered them to an unequivocal position as Asia’s leading cargo shipping companies.

10. CSCL: CSCL is the abbreviation for the China Shipping Container Lines, a company based in Shanghai. Started in the year 1997, the company soon rose amongst its ranks and today has propelled not just itself but also the country to leading heights in the container shipping industry. The company finds its name in both the Hong Kong and Shanghai Stock Exchanges.

Container shipping is a huge industry and these key players are aware of the minutest operational maneuverings necessary to power them to being the world leaders in the commercial enterprise, not just in their home countries but also at an international level.