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A STUDY ON IMPACT OF FREIGHT FORWARDERS OVER LINERS
THE PROJECT REPORT SUBMITTED TO
AMET UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION
IN
SHIPPING & LOGISTICS MANAGEMENT
BY
S.MARIA DOSS
(MBA / 0376 /10)
Under the guidance of
MRS.M.FATHIMA, MCA, M.Phil, MBA, M.Phil.
Assistant Professor, MANAGEMENT STUDIES
AMET UNIVERSITY
AMET UNIVERSITY
KANATHUR, CHENNAI-603112.
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DECLARATION CERTIFICATE
This is to certify that the work presented in the dissertation entitled A STUDY ON
IMPACT OF FREIGHT FORWARDERS OVER LINERS IN CHENNAI in partial
fulfilment of the requirement for the award of Degree of Master of Business
Administration, in Shipping and logistics Management from AMET University,
Kanathur, Chennai is an authentic work carried out under my supervision.
To the best of my knowledge, the content of this dissertation does not form a basis for the
award of any previous degree to anyone else.
(MRS.M.FATHIMA)
Date: Project Guide
Department of Management studies,
AMET University,
Kanathur603112, Chennai.
(MR. J.P.THIAGARAJAN) (MR. N. SRINIVASAN)
Head of Department, Dean,
Department of Management studies, Department of Management studies
AMET University, AMET University,
Kanathur603112, Chennai. Kanathur603112, Chennai.
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CERTIFICATE OF APPROVAL
The foregoing dissertation entitled, A STUDY ON IMPACT OF FREIGHT
FORWARDERS OVER LINERS
Is hereby approved as a creditable study of research topic and has been presented in a
satisfactory manner to warrant its acceptance as prerequisite to the degree for which it was
submitted.
It is understood that by this approval, the undersigned do not necessarily endorse any
conclusion drawn or opinion expressed therein, but approve the dissertation for the purpose
for which it is submitted.
(Internal Examiner) (External Examiner)
Head of the Department
Department of Management Studies
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ACKNOWLEDGEMENT
I would like to express my gratitude to our respected Chairman Dr.J.Ramachandran and our
Vice Chancellor Mr.S.Bhardwaj for their kind encouragement.
I am immensely thankful to my respected guide Mrs.M.FATHIMA, Lecturer, Department of
Management Studies, AMET University for his guidance support and encouragement
rendered to me throughout the project. I also wish to address special thanks to
Mr.N.Srinivasan, Dean, Management Studies, Mr.J.P.Thiagarajan, Head of Department of
Management Studies and Mr.J.Rengamani, Associate professor, Department of
Management Studies, for their support during the project.
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EXECUTIVE SUMMARY
This project says about an analysis of impact and expectation of freight forwarders over
Liners. The service of the Liners offered to different freight forwarders is becoming very
competitive. The research developed to understand the efficiency of Liners depends upon the
services such as cargo tracking, price fixing and other related cargo movement activities.
The busiest route for liners was on the North Atlantic with ships travelling between Europe
and North America. It was on this route that the fastest, largest and most advanced liners
travelled.
Liner Shipping is a service industry that by general acknowledgement provides the lifeline of
international trade. Suffice it to say that, due to the morphology of our planet, 90% of
international trade takes place by sea. Technological developments in ship design and
construction, and the ensuing economies of scale of larger ships, have also promoted trade
particularly that of developing nations- by making economical the transportation of goods
over long distances. This has expanded markets for raw materials and final products and has
facilitated the industrialisation of many countries around the world.
The method of data collection used by the researcher is
1. Survey method
2. Interview method
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CHAPTER PARTICULARS PAGE.NO
AKNOWLEDGEMENTS
EXECUTIVE SUMMARY
CHAPTER 1 INTRODUCTION
1.1OVERVIEW OF THE TOPIC
1.2 INDUSTRY PROFILE
1.3 SCOPE OF THE STUDY
CHAPTER 2 RESEARCH METHODOLOGY
2.1 RESEARCH OBJECTIVES
2.2 RESEARCH DESIGN
2.3 SOURCE AND TYPE OF DATA
2.4 RESEARCH TOOL
2.5 DATA ANALYSIS
2.6 LIMITATION OF THE STUDY
CHAPTER 3 REVIEW OF LITERATURE
CHAPTER 4 TOPIC SPECIFIC CHAPTER
BIBLIOGRAPHY
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CHAPTER 1
INTRODUCTION
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1.1OVERVIEW OF THE TOPIC
Although the freight forwarders are not a shipping line or a MTO or a NVOCC, we will
discuss their role as they are also an important role to play as far as liner shipping is
concerned.
The International Freight Forwarder is popularly known as the "International Transport
Architect". Ocean Freight Forwarders must be licensed by the U.S.
Federal Maritime Commission which refers to Forwarders as "Ocean Transport
Intermediaries" or, "OTI". An important part of the licensing requirements is the requirement
that the "OTI" post a General Surety Bond in the amount of $125,000 (Soon to be raised) to
protect the public. In India, a law is being contemplated to regulate the freight forwarders as
they are not regulated so far. In India, Customs house agents are regulated as their
competence is checked. For any malfeasance or misdemeanor, they can lose their licence to
operate. CHA, as they are called, have the ocean freight intermediaries in India for a long time
now and they were now acting as freight forwarders. Most of them still to be professionalized
in offering value added service to their clientele on par with what their counterparts in
developed countries offer.
The freight forwarding professional advises clients of the best rates, routings, and modes
of transporting goods to or from any area in the world. Using the vast resources at their
disposal, forwarders find the "right match" of services available so that products are moved
by the most timely and cost-effective means. The large volume of freight handled by
forwarders gives those advantages not always available to either individual shippers or
integrated carriers. The professional forwarder is also aware of the ever-changing
regulations affecting cargo movements, such as foreign documentation requirements,
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1.2INDUSTRY PROFILE
INTRODUCTION TO LINER TRADE
This introduction is made to offer the basic understanding of the nature and the scope of Liner
Shipping Business. It covers the origin and the history of growth of Liner Business as we
could see it today from theearlier days of sea bourne trade. The revolution in the shipping
industry and its commitment to varioustraders dealing world wide sitting in their territory
entrusting their responsibilities on the shipping professionalto move either their raw material
from a different country to their point of production and their finished goodsto the required
point of consumption is discussed in detail in the sessions to come.Liner shipping has seen the
dramatic changes in the last phase of the 20thcentury. By the beginning of thiscentury the
changeover had completed with Containerization supported in some areas by Roll-on/Roll-off
services accounting for almost all international movement of manufactured and semi
manufactured goods.
HISTORY OF LINERS
From the day when people identified and designed a craft that can be floated on the sea,
people started moving to different places from one place to another and whenever they had to
move, they moved along with their necessaries. As this could have been the very beginning of
either men or material started moving in thesea with a craft, in the later stages, whenever
people could think of having more comforts while in crafts,redesigned a better craft to
accommodate more persons and also more commodity / goods, the same havebeen carried
between two places and slowly between ports across the world.Arab dhows have for centuries
engaged in the trade between the Arabian Gulf and East Africa mainly depending upon winds
that blow them either northeast or southwest across the Indian Ocean.In the initial stages
when people started trading in the other place/country leaving their own place/country,they
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started carrying goods that can be traded in the different part of the world, in the ships. In
most of thecases, the Merchant happened to be the owner of the ship and he carried his own
goods to Trade. As theTrader was performing more roles one as the owner of the ship and
another as the trader, he had oneanother important role to play that was of the Captain of the
Ship also to monitor the crew and control theships activity and ships up keeping. As the
Captain he would seek out primly his own cargo to trade for hisprofits and the concentration
on various activities of managing the ship as in the position of a Captain as wellas performing
the Trade was felt to be a difficult task and this tough task laid the way for the trader or
thevessel owner to appoint personnel to take care of the ship activity and to manage it
technically. This was thefirst ever step by the vessel owner to appoint personnel to run the
ship on his behalf under his instructions. Though the Merchant had good comfort of engaging
professional to run the ship and to upkeep the ship, till the invention of steam power in 1820s,
the ships had to fully depend on the wind flow and based on the directions of wind flow only
the Merchants were trading. The success of the business and the business profits were entirely
based on the fortune of Wind Flow andthe successful completion of voyage and hence there
was absolutely no fixed sailing of the ships. During 1820s for the first time, ships have
become independent of the wind. When the ships could sail on their own without the
influence of weather conditions and the wind flows, Merchants could fix certain timetable for
the vessels to sail from one port. After 4 decades, during 1860s, when the steam power has
become more reliable, larger size vessels were put in operation and this was enabling the
vessel owners to offer regular scheduled services in main traderoutes.Keeping the above to be
the beginning of Liner Service, the seaborne trade was carried out in many forms based on the
type of ship. There could be no interchangeability of the cargo from one vessel to another
unless both the vessels are of same nature. When container ships can carry all types of cargo
in enclosed containers, specific ships were used to carry products like Grain, Ores and Liquid
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nature. Ro-ro ships andferries were used to carry cargo on trucks or other wheeled
vehicles.Most of the seaborne trade, say about 90%, is of bulk cargo and homogenous in
nature. This consists ironore, manganese ore, coal, forest products, bauxite, phosphates and
grains. Since these type of commodityare traded in bulk in huge volume and one vessel is
capable of carrying only one type of cargo (unless andotherwise specific designs are made to
carry more than one cargo), the vessels engaged to carry these typeof products are called
BULK CARRIERS. The size of the ship vary from few hundred tones cargo
carryingcapacity to a maximum of over 0.3 million tones.Apart from Bulk Carriers, other
large group of vessels are designed to carry liquid Cargoes and/or Gas andcalled
TANKERS. These vessels are specially designed to meet the demands of the type of cargo
they will have to carry. After the containerization and the change of packing style to
accommodate cargo in containers to ship-out from one port to another, the volume of growth
in container traffic got increased and today many a bulk commodity which were traded on
bulk basis now being traded in containers. In total, moving goods by sea or waterways is
found to be the most economic method of transport in terms of the cost per ton-mile base. It is
estimated that 90% of the worlds trade is carried by sea and that this represents some 20
trillion ton miles. Statistics shows that the volume of goods carried by sea has increased nine-
fold in the last 50 years.
1.2.1 LINER SERVICE DEFINED
Liner shipping provides a fixed frequency and between a set of specified ports according to a
prefixed schedule. This resembles a Train time table and assures a predictable time frame of
transit for export and import trade who could plan their procurement as well as production.
Whether the vessel is full or not, the liner vessels will call on a particular port on the
appointed day. Liner vessels also are meant for the trade at large. That means any importer
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and or the exporter can approach the liners with a space request. Provided space is not fully
sold, the liner will accommodate all requests. In this aspect, the liners are common carriers.
All legal cargoes will be accepted without discrimination. The number of users of liner vessel
is many. To simplify, the space is being sold in retail. This has its disadvantages as we will
see later.
The tariff is also announced in advance and the cost of carriage is also well factored
into by the trade. Any increase in rates for operational reasons is advised to trade at least few
weeks in advance. The structure of rates is made clear to all customers from time to time. In
ongoing, regular businesses negotiate the rates well in advance and have rate contracts in
place. These rate contracts are basically agreements to provide a set of rates which will
remain firm or vary according to mutually agreed formula. This makes sense for both parties;
the liner would like to have some portion of stable volumes throughout the year which are to
be expected with contracts. The trader would like to avoid discussing rates at periodic
intervals. He will be better off when he negotiates a larger quantity spread over a period. This
gives him a stable rates as well as a firm costing to quote for his products for a longer time in
future.
The rates in liner service are usually value added products and hence the rates higher
than in tramp trade. Again in tramp trade, the quantities involved are huge and hence freight
rates are lower.
In view of the complexities involved in liner trade the offices of liner companies are higher.
Marketing is involved and hence the number of persons for sales and after sales marketing is
higher.
Liner shipping has a number of customers as it carries many cargoes for many clients. The
customer will look for, besides low freight rates, least transit times, more frequency and high
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performance in slippages in schedules. A liner service with poor track record of delays will
have to offer lower freight rates. Better liners can and do demand higher rates. The
connectivity to important ports is vital and the acceptable transit times for sensitive cargoes
enhance the marketability of liners. Liners preserve to be seen as a brand rather as a
commodity by their market friendly service patterns and attractive freighting policies. The
service package, among other things, consists of advising the clients of vessels arrivals,
feedback on their cargo tracking, Delivery details and in general keeping the clients advised
of any delays to vessels. Nowadays, this kind of service is given 24/7 when the cargo tracking
is done on line. The client with the help of the Bill of lading number can access the website of
the Liner and can check for himself the status of the cargo. Any line who does not offer such
state-of- the-art tracking cannot face the demands of the market place and will have to be
satisfied with lower end of the clients.
To summarise, Liner service has fixed schedules, regular frequency and a tariff for all
destinations and is meant for a large number of customers. Stable rates for a period of time are
a must. Predictability in rates, schedule and fixed transit times help sellers and buyers plan
their inventory as well as their production programmes.
For containerised business it has now become a standard practice to have no less than
a weekly service. Some have biweekly service. These services are invariably on fixed day
sailings and fixed day arrivals. The entire chain of container movement from one place to
another can be predicted well in advance. Trade plans their inventories and sales based on
this. This high precision in arrivals reduces the idle stocks and eliminates safety stocks. In
fact, one of the factors behind the successes of globalisation lies in the fact that supply chains
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are slick and offer reduced costs of the operation of the chain. This improves the volumes as
costs are lower.
For non containerised business, a fortnightly or a service every 3 weeks may be
considered adequate as the client base is small and the trade may not be able to offer regular
volumes at shorter intervals. In case of car carriers, the frequency is mutually agreed between
the exporter (usually the car manufacturer) and the liner. This could vary from 10 days to a
month. Here in most cases, the exporter is one or at most, few car companies. Planning
exercise is relatively simple as only few companies are involved.
For liner companies, it is necessary to have a large suite of clients as they are
committed to a long term schedule and would expect to high percentage of loading
consistently. This is all the more important as competition is very stiff and getting high rates
is very difficult and hence, the loading has to be near full so that profits are not eroded. In
liner service, it is thus important to have an aggressive marketing team which will maximize
the loadings. It is also important to have representation in hinterland points as well as in
Inland Container depots to canvass for cargo. Liner agency will have subagents or, if the
business is vital, their office in off port locations so that cargo interests are always kept in
touch with. Traditionally, the shipping was port based but containerisation, because of its
multi modalism, has ensured that shipping activity moves closer to the actual shippers and
consignees, no matter where they are. This aspect of business finds that the better liner
companies specializing in containerisation having offices in all cargo rich interior points. For
example, all shipping companies in India will have an office in New Delhi or in Bangalore in
India as these places are full of important exporters and importers.
Liner companies also have more persons compared to tramp business as each seller
has to be given a bill of lading for his cargo and this will have to be manifested. The
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documentation requirement is more as more consignments are handled per vessel call. In
addition as we saw earlier, the marketing and customer service is very vital and is person
intensive.
Besides, every consignment has to be receipted at load port end and at discharge port
end; it has to be delivered to the correct consignee. The customs papers have to be prepared at
either end which is called manifests. There is again reporting of consignments taken in for the
purpose of accounting to the agency and to the principle. Collected freight has to be
accounted and repatriated for every single consignment. Then we have claims of short
delivery or loss or damage and these claims have a tendency to prolong for interminable
lengths of time. All these mean that the liner agency is to be staffed adequately than a tramp
agency as documentation needs are very heavy. Paperwork is heavy which is easy to mange
these days as computers are helping us cope with the workload.
Liner business, to sum up, essentially has a fixed schedule, a prenegotiated or pre
existing tariff which is fairly stable and fair amount of loyal customers. It is also people
intensive as it requires more marketing staff and operational staff.
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1.3 SCOPE OF THE STUDY
The study is all about the freight forwarders attitude towards the liners, the impact and
expectation level of freight forwarders towards liners in and around Chennai. The study
reviews the services offered by the liners to their customers in various aspects of imports and
exports. So the researcher here approaches various customers of different liners and studies
their level of satisfaction and expectation that are gained from their liners. So the researcher
here studies for the benefit of both freight forwarders and liners in terms of satisfaction and
good service respectively.
The methods of research study used by the researcher to observe in customer point of
view are survey method, observation method and case study method. So the surveys can be
done personally, telephonic and mail surveys. Observation can be done by structured and
unstructured methods. So the researcher prepares a structural questionnaire format to
understand customers needs and expectation from the freight forwarder in sending and
receiving cargos.
So the researcher after reviewing the various customers about their impact and
expectation he will observe the services offered by the freight forwarders and gives a review
to the freight forwarders to know their strength and weakness in acting as an intermediate, by
knowing the following facts the freight forwarder can access good services to their customers
which will be much useful for their market growth and to retain the customers and to bring in
more customers to their services.
So the researcher hereby says that the study is done for the favour of both customers
and freight forwarders, majority of this research is held for the purpose of the growth and
diversification of the freight forwarder.
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CHAPTER 2
RESEARCH METHODOLOGY
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2.1 RESEARCH OBJECTIVES
To study the expectations of freight forwarders from Liner service
To study whether the freight forwarders are satisfied by Liner services
To study whether customers are willing to go for freight forwarders or liners
To study the satisfaction level of freight forwarders in approaching different Liners.
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2.2 RESEARCH DESIGN
DESCRIPTIVE RESEARCH
Descriptive research includes surveys and fact-finding enquiries of different kinds.
The major purpose of descriptive research is description of the state of affairs as it exists at
present. In social science and business research we quite often use Research Methodology: the
term Ex post facto research for descriptive research studies. The main characteristic of this
method is that the researcher has no control over the variables; he can only report what has
happened or what is happening. Most ex post facto research projects are used for descriptive
studies in which the researcher seeks to measure such items as, for example, frequency of
shopping, preferences of people, or similar data. Ex post facto studies also include attempts by
researchers to discover causes even when they cannot control the variables. The methods of
research utilized in descriptive research are survey methods of all kinds, including
comparative and correlational methods.
Descriptive research does not fit neatly into the definition of either quantitative or
qualitative research methodologies, but instead it can utilize elements of both, often within the
same study. The term descriptive research refers to the type of research question, design, and
data analysis that will be applied to a given topic. Descriptive statistics tell what is, while
inferential statistics try to determine cause and effect.
The type of question asked by the researcher will ultimately determine the type of
approach necessary to complete an accurate assessment of the topic at hand. Descriptive
studies, primarily concerned with finding out "what is," might be applied to investigate the
following questions: Do freight forwarders hold favourable attitude towards liners in sending
cargoes? Descriptive research can be either quantitative or qualitative. It can involve
collections of quantitative information that can be tabulated along a continuum in numerical
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form, such as scores on a test or the number of times a person chooses to use a-certain feature
of a multimedia program, or it can describe categories of information such as gender or
patterns of interaction when using technology in a group situation. Descriptive research
involves gathering data that describe events and then organizes, tabulates, depicts, and
describes the data collection. It often uses visual aids such as graphs and charts to aid the
reader in understanding the data distribution. Because the human mind cannot extract the full
import of a large mass of raw data, descriptive statistics are very important in reducing the
data to manageable form.
Descriptive statistics utilize data collection and analysis techniques that yield reports
concerning the measures of central tendency, variation, and correlation. The combination of
its characteristic summary and correlational statistics, along with its focus on specific types of
research questions, methods, and outcomes is what distinguishes descriptive research from
other research types.
Three main purposes of research are to describe, explain, and validate findings.
Description emerges following creative exploration, and serves to organize the findings in
order to fit them with explanations, and then test or validate those explanations. Educational
researchers might use observational, survey, and interview techniques to collect data about
group dynamics during computer-based activities.
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2.3 SOURCE AND TYPE OF DATA
PRIMARY DATA
Primary research data consists in research to collect original data. It is often
undertaken after the researcher has gained some insight into the issue by collecting secondary
data. This can be through numerous forms, including questionnaires, direct observation and
telephone interviews amongst others.
THE 3 BASIC TYPES OF DESCRIPTIVE RESEARCH METHOD
(METHOD OF PRIMARY DATA COLLECTION)
One of the goals of science and business is description (other goals include prediction
and explanation). Descriptive research methods are pretty much as they sound they
describe situations. They do not make accurate predictions, and they do not determine cause
and effect.
There are three main types of descriptive methods: observational methods, case-study
methods and survey methods. This article will briefly describe each of these methods, their
advantages, and their drawbacks. This may help you better understand research findings,
whether reported in the mainstream media, or when reading a research study on your own.
OBSERVATIONAL METHOD
With the observational method (sometimes referred to as field observation) animal and
human behaviour is closely observed. There are two main categories of the observational
methodnaturalistic observation and laboratory observation.
The biggest advantage of the naturalistic method of research is that researchers view
participants in their natural environments. Laboratory observations are usually less time-
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consuming and cheaper than naturalistic observations. Of course, both naturalistic and
laboratory observation are important in regard to the advancement of scientific knowledge.
CASE STUDY METHOD
Case study research involves an in-depth study of an individual or group of
individuals. Case studies often lead to testable hypotheses and allow us to study rare
phenomena. Case studies should not be used to determine cause and effect, and they have
limited use for making accurate predictions.
There are two serious problems with case studies expectancy effects and atypical
individuals. Expectancy effects include the experimenters underlying biases that might affect
the actions taken while conducting research. These biases can lead to misrepresenting
participants descriptions. Describing atypical individuals may lead to poor generalizations
and detract from external validity.
SURVEY METHOD
In survey method research, participants answer questions administered through
interviews or questionnaires. After participants answer the questions, researchers describe the
responses given. In order for the survey to be both reliable and valid it is important that the
questions are constructed properly. Questions should be written so they are clear and easy to
comprehend.
Another consideration when designing questions is whether to include open-ended, closed-
ended, partially open-ended, or rating-scale questions. Advantages and disadvantages can be
found with each type:
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Open-ended questions allow for a greater variety of responses from participants but are
difficult to analyze statistically because the data must be coded or reduced in some manner.
Closed-ended questions are easy to analyze statistically, but they seriously limit the responses
that participants can give. Many researchers prefer to use a Likert-type scale because its very
easy to analyze statistically.
In addition to the methods listed above some individuals also include qualitative (as a distinct
method) and archival methods when discussing descriptive research methods. It is important
to emphasize that descriptive research methods can only describe a set of observations or the
data collected. It cannot draw conclusions from that data about which way the relationship
goesDoes A cause B, or does B cause A?
Unfortunately, in many studies published today, researchers forget this fundamental limitation
of their research and suggest their data can actually demonstrate or suggest causal
relationships. Nothing could be further from the truth.
ADVANTAGES OF DESCRIPTIVE RESEARCH
Educational research and experiences may contain many variables that cannot be
realistically controlled.
Educational research may require observations of life experiences
Data collection may be spread over a large number of people over a large geographic
area
The advantages of descriptive research include data collection and life experiences
The people being studied are unaware so they act naturally or as they normally do in
everyday situation;
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2.4 RESEARCH TOOL
QUESTIONNAIRE: A questionnaire is a research instrument consisting of a series
of questions and other prompts for the purpose of gathering information from respondents.
Although they are often designed for statistical analysis of the responses, this is not always
the case. The questionnaire was invented by Sir Francis Galton.
Questionnaires have advantages over some other types of surveys in that they are cheap, do
not require as much effort from the questioner as verbal or telephone surveys, and often have
standardized answers that make it simple to compile data. Questionnaires are also sharply
limited by the fact that respondents must be able to read the questions and respond to them.
QUESTIONNAIRE CONSTRUCTION
A questionnaire is a series of questions asked to individuals to obtain statistically
useful information about a given topic. When properly constructed and responsibly
administered, questionnaires become a vital instrument by which statements can be made
about specific groups or people or entire populations.
Questionnaires are frequently used in quantitative marketing research and social
research. They are a valuable method of collecting a wide range of information from a large
number of individuals, often referred to as respondents. Adequate questionnaire construction
is critical to the success of a survey. Inappropriate questions, incorrect ordering of questions,
incorrect scaling, or bad questionnaire format can make the survey valueless, as it may not
accurately reflect the views and opinions of the participants. A useful method for checking a
questionnaire and making sure it is accurately capturing the intended information is to pre-test
among a smaller subset of target respondents.
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2.5 DATA ANALYSIS
The process of evaluating data using analytical and logical reasoning to examine each
component of the data provided. This form of analysis is just one of the many steps that must
be completed when conducting a research experiment. Data from various sources is gathered,
reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of
specific data analysis method, some of which include data mining, text analytics, business
intelligence, and data visualizations.
REGRESSION ANALYSIS
Regression analysis is a statistical tool for the investigation of relationships between
variables. Usually, the investigator seeks to ascertain the causal effect of one variable upon
anotherthe effect of a price increase upon demand, for example, or the effect of changes in
the money supply upon the inflation rate. To explore such issues, the investigator assembles
data on the underlying variables of interest and employs regression to estimate the
quantitative effect of the causal variables upon the variable that they influence. The
investigator also typically assesses the statistical significance of the estimated relationships,
that is, the degree of confidence that the true relationship is close to the estimated relationship.
Regression analysis is widely used for prediction and forecasting, where its use has
substantial overlap with the field of machine learning. Regression analysis is also used to
understand which among the independent variables are related to the dependent variable, and
to explore the forms of these relationships. In restricted circumstances, regression analysis can
be used to infer causal relationships between the independent and dependent variables.
Qualitative Data Analysis
Qualitative research is much more subjective than quantitative research and uses very
different methods of collecting information, mainly individual, in-depth interviews and focus
groups. The nature of this type of research is exploratory and open-ended. Small numbers of
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people are interviewed in-depth and/or a relatively small number of focus groups are
conducted. Participants are asked to respond to general questions and the interviewer or group
moderator probes and explores their responses to identify and define peoples' perceptions,
opinions and feelings about the topic or idea being discussed and to determine the degree of
agreement that exists in the group
Principles of questionnaire construction. The participants went through fifteen main
principles guiding the development of quality questionnaires. Each principle was illustrated
with sufficient examples.
Differences between qualitative research and quantitative research. It was felt that
understanding the differences between the two was necessary in understanding the
appropriateness of each type of research, appreciating the methods of collecting and analyzing
data.
Quantitative Data Analysis
The term quantitative data is used to describe a type of information that can be
counted or expressed numerically. This type of data is often collected in experiments,
manipulated and statistically analyzed. Quantitative data can be represented visually in
graphs, histograms, tables and charts.
Nominal, ordinal, interval and ratio scales of measurement. Sufficient examples and
practical exercises were given to 5 participants using samples of questionnaires to
identify the scales of measurement for various questionnaire items.
Considerations in levels of scale measurement
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2.6 LIMITATION OF THE STUDY
Descriptive studies can yield rich data that lead to important recommendations. On the
other hand, descriptive research can be misused by those who do not understand its purpose
and limitations. For example, one cannot try to draw conclusions that show cause and effect,
because that is beyond the bounds of the statistics employed.
The opinion of the respondent may be biased by interviewer
Individual perception may be reflected on the research questions.
Time availability
High Cost
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CHAPTER 3
REVIEW OF LITERATURE
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The literature review here reviews about a project done by a consultancy company Drewry
on liner shipping services the below things are reviewed and analysed by the organisation
as follows
The Drewry team recommended that the client should continue to operate the
business unit, having identified strong upwards revenue and profit potential.
A medium term strategy for securing appropriate vessel capacity was recommended
At the same time, partnership and / or sale opportunities were identified that might
provide for a future managed exit from the sector to maximize the realization of
tangible and intangible asset values.
The client adopted the recommendation to continue operations in this business unit
and the positive projections for its profitability were subsequently borne out by
results well in excess of the clients own projections at the time of the study.
These results have confirmed the validity of the recommendation to retain the
business unit, unless a sale at full asset value could be secured
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CHAPTER 4
TOPIC SPECIFIC CHAPTER
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LINER SERVICES
There may be considerations of integration of services with its network of hinterland services
or with other services at the hub points. This is very important and complex and will be seen
briefly here.
The liner service is a round trip from Port A to Port B. We shall take a simple case of a liner
wanting to operate a liner service between Indian sub- continents to Europe. We shall see this
project in some detail to understand the basics of liner service design.
The starting point is Colombo. Colombo is chosen as this is suitably situated as a hub for all
peninsular ports like Chennai, Cochin, Tuticorin, Vizag besides Calcutta and Chittagong. The
presence of regular feeders from these ports makes it an ideal port for collecting good volume
of cargoes. These ports also have a large volume of imports and hence they may contribute
well. Colombo is a good hub as the mainliners are assured of a fast turnaround and cargo
collection for transhipment is smooth and fairly cheap. For developing this study we shall be
assuming some figures which may be slightly at variance with the actual.
We also want the Indian cargoes from the North as well as west and decide to call Mumbai
ports. That could be Old Bombay port or Nhava Sheva International Container terminal(NSICT) OR Jawaharlal Nehru Port (JNP). Then we want to call Felixstowe in UK from
where we can connect all places in UK as there is very reliable grid haulage in place. The next
port of call is Antwerp which is an efficient port which has good connectivity to all nearby
cargo rich areas including Rotterdam. In fact, the decision to call either Antwerp or Rotterdam
may be a close one as either port has lot of merits. Then we call at Hamburg which is the
farthest we go before embarking on long voyage back to Colombo. In all the ports, we do load
and discharge simultaneously which reduces the time in port.
As we start calculating the time required for port stay as well as the ocean passages, we need
some idea of the productivity we expect from the terminals as well as the sea distances. We
shall tackle this as we go along. At Colombo, we will be discharging Peninsular India
containers as well as Calcutta and Chittagong containers. We presume that the vessel is about
1600 teus of capacity and about 600 will be filled up in Colombo. This means that the exports
will be 600 Teus and taking matched imports, the total throughputs will be 1200 Teus. We
assume for the sake of simplicity that all are 20 only. With 3 gantries working with 25
moves per hour, the number of hours required will be 16 hours (= 1200/25 x 3). This is only
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an approximation. As the vessel nears completion, all 3 gantries will not work as only the
gantry with maximum moves will keep working. This will extend the berth stay. Also we
need to provide for berthing and un berthing of the vessel or any tidal times for such activity.
Later, we need to provide for lashing and checking the containers as well as for any port
procedures etc. it is prudent to provide 1 day for such eventualities. Overall we will provide 2
days for entry and exiting port of Colombo. If we have a mixture of 20 and 40, the numbers
of containers will be less although the Teus will be same. In such a case the berth stay will be
even less.
Likewise, we keep calculating the times spent in the port as well as on the sea passage
keeping in mind always the times are rounded off to the next higher full days to provide for
suitable cushion for any slippages in schedule. In case of European ports, the productivity is
high and highly reliable and hence 0.5 days can be taken as standard. Also a minor point; as
vessel sails east bound, the vessel will sail against the clock as the transits will appear to be
for more than 24 hours per day of sailing but this can be ignored for all practical purposes as
the reverse will be true when vessel is west bound. For persons who are not convinced, for
every degree of sailing east the local clock is ahead by 4 minutes and the ship would appear to
have sailed for one hour and 4 minutes but in actuality, it would have sailed only for 1 hour.
From the above, we realize that the total time for the complete voyage is 42 days. That is, this
vessel will be back to Mumbai just after 42 days. That is 42 days divided by 7 days. This
means that to provide a weekly service we need 6 units. If we use larger vessels of same
speed, the sea passage times will remain same but the stay at ports will increase as the vessel
may be given same number of gantries but through puts in each port may be higher. Hence
with larger vessels, the total time will increase and more number of vessels will be required
for a complete service.
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If we add some more ports like Port Said or Barcelona to cover east med and west med ports,
the port stays and slight deviation will increase the total voyage time. More number of units
will be definitely required as the total voyage time will increase.
Taking this designing of the liner service further, we have presumed the exports at Colombo
as 600 teus per week. We need to break this up further in terms of who is going to offer this
kind of volume on a weekly basis. Traditionally, Colombo freights are low enough as some
east west carriers call at Colombo and top up any unfilled slots and hence rates are rock
bottom. Assume the following indications from load ports on their volume and rate
indications for European direct ports.:
COMMON CARRIER
Common carrier is a carrier who holds himself ready to carry from place to another the goods
of any person for a hire or reward. One type of such a carrier is a ship that offers the regular
scheduled service is called a cargo Liner. A vessel engaged in transporting goods for reward
and offering space to all who wish to take advantage of offer, then it is called a liner service.
A vessel is operating as a common carrier in a regular scheduled route and in regular schedule
of time, it is said to be in a Liner Service. Until the demise of Sea Passenger Services in the
1960s, many Liners provided a combined service with Cargo, Passengers and Mail. As the
Liner faced few a problems since it happened to have a dual functioning, it got divided into
functional typesnamely The Passenger Ships and Cargo Vessels. While the passenger ships
carried limited quantities of mail also, cargo vessels were not allowed to carry passengers.
The main requirements to recognize a service, as a Liner Service will have to have the
following:
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FIXED SCHEDULE
A vessel should have a fixed sailing schedule. If a vessel is expected to be available in a port
either for loading or discharge, it has to be made available irrespective of the cargo
availability. For example if theETA of the vessel is made as 01-02-008, the vessel has to call
on that particular port as scheduled.Depending upon weather conditions and unexpected
technical faults of the ship, the variance of arrival dateto a particular port will not affect the
basic and basis of liner shipping function, since the delay is beyond thecontrol of the vessel
operator.Every Liner used to give regular advertisement announcing its arrival and departure
schedule enabling themerchants as well as their agents to plan for the shipments and to make
the cargo available in the port inorder to ensure loading of the cargo in the vessel.Any cargo
moved towards the port before the window / gate opening of the particular vessel, shall have
towait till the gate is opened enabling the port to receive the cargo / container in the respective
yard.
FIXED ROUTE
Fixed Schedule goes with fixed route. A vessel expected to cover various ports will have to
have a fixed timeschedule to call at the respective port. No deviation from the route will be
allowed because of non-availabilityof cargo at any one of the ports in the trade route fixed
already.To summarize, Liners Services sail on scheduled dates, ply on a regular scheduled
service between groupsof Ports, irrespective of Cargo availability.
REGULARITY
Liner Service as seen above, it is a Common carrier having fixed trade route and a fixed
schedule. With allthese, regularity in service is also one of the main characteristics of a Liner
Service.Regularity means, operating in a trade route as per schedule and just any one or trial
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service in the regionand calling off the service from the route. Any trial service in a route may
be an ad-hoc service and thiscannot be recognized as a Liner Service.Review
Questions:1.What is a Tramp Service?2.Explain the characteristics of Liner Service. Can you
recognize an operator who does notcall few ports in the return voyage as a Liner Service
Operator?3.Differentiate between Tramp Service & Liner Service.
LINER TRADE ROUTES
After having understood the characteristics of Liner Services, it becomes easy to have an idea
about thetrade routes in which generally the Liner Services are made available or
operational.The main ingredient of a Liner Service being the common carrier operating in a
fixed schedule and in a fixedroute, the trade routes of the liner companies are basically
depending upon the potential in the proposedtrade route and the economics of scale.Fixed
schedule at a fixed route is justified not only on the potential of the market and the economics
of scaleof operation but also on the strength of the operator to penetrate the market and to
obtain his share of cargoin order to make the vessel operation viable.Penetration of market
and capturing of cargo to the vessel is though based on offering of direct services andbetter
transit time, this alone cannot fetch the cargo and hence enough of consideration being given
on thepricing also.The Liner freight rate structure and economics are discussed in detail in the
ensuing sessions. The primeLiner Routes in which the shipping companies operate are
outlined for the basic understanding.It is essential for the students to know how the shipping
companies operate in the open sea covering theentire globe sector wise and the availability of
various trade routes.Until about 50 years ago, the important Liner Trade routes were
predominantly those, which connected theEuropean powers with their colonial empires and
the USA. The geographical routes were mainly in theNorth / South orientation. After the
Second World War, a number of important political and economicchanges occurred which
eventually altered this trading pattern completely.Trade routes developed with gradual
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colonization of the continents of the world. When the wind power wasrelied and no timetable
was there, the Mediterranean saw the movement of Roman fleets, while Chinese junks carried
goods around the coasts of Eastern Asia. The major sailing ship routes were as below, just
prior to the advent of steam power. When sailing ships were built in larger size, trading
patterns and different routes were established.
A large proportion of the cargoes exported from Europe were manufactured goods except for
coal transported in bulk.
TYPES OF VESSELS RENDERED BY LINER SERVICE:
Conventional ships
Essentially, there are 3 broad types of liner ships for cargoes-break bulk, container and car
carriers. The general characteristic of ships has been seen in the earlier block. Some basic
details have been seen in 2.2.4 of block 1 about the conventional ships.
Conventional ships have been in existence for centuries and have evolved by each civilization
according to their needs. These have been designed according to the materials available
readily with them. These had come a long way and although their utility is becoming less felt
now, as mentioned earlier they still have a role to play. Especially in case of mobilisation for
war, all break bulk ships are requisitioned as containerised vessels cannot carry heavy
equipments. The recent example was the US war effort in Iraq when the demand for break
bulk vessels went up so sharply when time and speed was of the essence.
The conventional liner service is by no means defunct. This type does not have the frequency
or popularity of container ships. There are break bulk sailings from Europe and to China /
Japan from /to India on a fairly regular basis. They carry steel billets and machinery inwards
into India and carry granite blocks out of India. As volumes are steady and good, the liner
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services in these routes are viable. It is to be noted that these cargoes are not containerisble as
they are unwieldy and their load density is far higher than what containers can bear.
Once the dominant method of moving goods over land and water, break bulk shipping appears
to be slowly, steadily sliding towards extinction worldwide. It's even getting harder and
harder to find people in the general transportation industry who have actually heard of the
term.
In general, break-bulk cargo is anything that can't be sucked out of a ship with a vacuum or
placed in a steel container box. Though the break-bulk market has declined steadily in recent
years, it still accounts for plenty of goods, starting with perishables and also including giant
rolls of newsprint and plate steel, some types of lumber and wood products and even rebar.
Yet in each of these areas, when it comes to global transport, break-bulk seems to be losing
ground rather than gaining it. What we've seen in the past few years, just generally speaking,
is that the container shippers got a lot more competitive in their rates and a lot of traditional
break-bulk cargoes that were palletized changed mode from break-bulk to containerize. Steel
is one example of a commodity that is moving in boxes instead of break-bulk. Most steel
products that we ship do fit within those containers. Even coils fit within those containers.
.A demanding inter modal marketplace is one reason for the shift away from break-bulk.
Shippers want to get their containers off of ships and to the marketplace as fast as possible.
Unless ports and other facilities are capable of moving with unprecedented speed, break-bulk
simply can't supply the efficiency today's accelerated supply chains demand.
One of the areas where the shift from break-bulk is most pronounced is in the perishables
sector. Not long ago, break-bulk ships ruled the perishables market. Virtually all products
moved in vast, refrigerated vessels stacked on carefully arranged pallets. Today, more and
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more perishable goods are moving via refrigerated containers. "The reefer fleet now provides
around 40 percent of nominal reefer capacity," says a recently published report by London-
based Drewry Shipping Consultants. Refrigerated containers moving on conventional
containerised vessels make up the other 60 percent, the company says.
Volume is declining to the point where the total size of the perishable industry break-bulk
fleet is shrinking. "By end-2002, the reefer fleet numbered 1,253 ships with a combined
capacity of 348.9 million cubic feet," a smaller number than in years before, Drewry says.
Additionally, the global reefer fleet is developing a "mid-age" profile, with the average ship
more than 20 years old.
In some ways, bad news for the reefer industry turned out to be good news for perishables
shippers. A slow economy and overcapacity translated into bargain rates in recent years. In
the past two-three years, the freight market has not been kind to reefer ship owners. The
future is not without hope, however, but the continued incursions from the reefer box sector
mean the reefer market is no longer in full control of its own destiny.
Not all the news is bad in the world of break-bulk. Market difficulties for one sector can prove
to be opportunities for others, and that's what some say is happening with break-bulk. In areas
where a sizeable infrastructure and sophisticated technology are needed, break-bulk traffic
remains strong.
Newsprint traffic will stay break-bulk for the foreseeable future. A single roll of newsprint
takes up four feet by four feet and weighs 2,200 to 2,300 pounds. One ship can carry 8,000
tons of newsprint. Specialized equipment is needed to handle the goods with any kind of
efficiency-which means that the ports and service providers that are willing to invest in those
services will have a chance to profit.
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Getting traffic of any kind isn't easy and ports had better be prepared to invest large amounts
of time and energy if they want to go anywhere when it comes to break-bulk products. Most
ports all over, especially the ports which are closer to major container ports are investing
money to attract and retain break-bulk traffic. The key factor is to ensure that there is zero
damage, and that it is efficient and cost-effective. Shippers are looking for facilities that both
have high level of expertise and that are willing to invest in specialized technologies.
Many cargoes are also simply not suited for containerisation. Some ingots are so heavy that
just a few of them will fill a container beyond its legal weight, leading to huge amounts of
legal space. Some of the break-bulk building products that are constantly coming in are
simply too large to fit into a conventional container. In many cases, it is also more cost-
effective for a shipper to charter an entire vessel and load it up with a single product than it is
to rely on a containerised carrier that has to make myriad different stops.
It's far too soon to be writing obituaries for break-bulk though. The reality is that break-bulk
volume is growing worldwide by about 3 percent-a paltry rate compared to container cargo,
which in many ports is soaring at 10 percent or more, but enough to make for a satisfactory
business for both ports and shippers in the end, it's all about money. The shift in shipping
patterns is, after all, price driven.
2.1.3.2 Container ships
Before we see the emergence of container liner services, a brief historical background will
be in order. After the World War II, the world saw a renaissance of trade and growth. One
factor was the technology which was invented during the war was sought for peaceful and
commercial exploitation. The world saw a huge investments and relief being extended to the
vanquished countries like Germany and Japan. Both rose from ashes and saw a unprecedented
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growth for decades. Marshall Plan and other generous acts of USA and other richer countries
helped recovery of the world economy
During the decade following the end of WWII, the world saw heavy delays of break-bulk
vessels all over. The ports could not keep abreast at all with the load discharge rates. Port
stays got longer and longer. The ships started having to wait for their berth. The waiting
periods were building up everywhere. In West African ports, the pre-berthing delay was over
6 months. In gulf ports, it was over 3 month in Khorramshahr (which was the name for
Bandar Khomeini then). In Bombay as it was known then, the delays were over 5 weeks. The
turnaround of the ships suffered. The number ships required went up considerably. Freight
rates went up and for getting your imports you have to plan months in advance. Some short
term measures were tried and worked for some time and in some cases-like constructing
newer ports near the centres of mass consumption or near centres of mass production. Another
technology used was palletization of cargoes and pre-slinging the cargoes etc.
To understand this scenario, we need to understand the break-bulk operation. The ship loads
break-bulk pieces which may or may not be uniform. The heaviest piece is loaded at the
bottom and the lightest at the top. The cargoes for the first port of call are loaded at the top for
easy access and the last port of call is at the bottom. All this appears simple and imagine that
at every port you should have the same configuration of stowage. Heaviest cargo may not go
for the last in rotation. At every port you may have to discharge and reload the cargoes if the
cargo for that port is under stowed. The marks and numbers may not be always visible or even
if visible; it may not be understood by the local labour.
In ships, the stevedore is a person who arranges labour for loading and discharging. In Britain,
such men are usually called Dockers while in the U.S. the term longshoreman is used, derived
from "along-the-shore man". Loading and unloading ships is skilled work that needs operating
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loading equipment, the proper techniques for lifting and stowing cargo and correct handling
of hazardous materials.
In earlier days, men who load and unload ships had to tie down cargoes with rope. A special
form of stop knot is called the stevedore's knot. The methods of securely tying up parcels of
goods are called stevedore lashing or stevedore knotting.
While loading a general cargo vessel, they use tonnage, which are pieces of wood (or
nowadays sometimes strong inflatable bags) set down to keep the cargo out of any water that
might be lying in the hold or are placed as shims between cargo crates to keep them from
shifting during a voyage.
They are expected to be physically strong and able to follow orders. The labour has to be not
only strong but also clear in their understanding of precautions to be taken while loading,
lashing and securing the cargoes. The cargoes should not cause any damage to any other
cargo or to the ship and its machinery. For example, the cargoes which can taint others should
not be loaded along with other cargoes. For example, tobacco is never loaded with the in the
same hatch as both have strong aroma and can taint each other. There are many other
considerations in loading of conventional cargoes which a stevedore has to take care.
Traditionally, stevedores would have no fixed job and turn up at the docks in the morning
hoping to find someone willing to employ them for the day. London dockers and Deal porters
called this practice "standing on the stones". In Britain, due to changes in employment laws,
such jobs have either become permanent or have been converted to temping jobs.
The plethora of cargoes and with different ports of call in a conventional cargo vessel can be
very tough to plan. With some good and accurate planning, the land/reload can be minimised,
if not eliminated. However, the basic issue remains that the stevedore has to not only to plan
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stowage and load cargo but he has to lash secure without damaging the cargo or the ship or
other cargoes already in the ship. Along with that, if we can give a give a good turnaround for
the ship with his productivity, he can consider himself good.
Traditionally, for general cargoes, if we get a productivity of about 150 mts per hook per shift
we can be very satisfied about it. So a vessel having to load and discharge about 2000 mts can
expect to stay in the port for over 3 days with 2 hooks operational. If we have complex
cargoes or any over stow problems then the ships stay will be prolonged. In a conventional
ship, loading a single piece of cargo, be it a crate or pallet or a granite block, involves at least
2 persons in the wharf and 2 in the hatch plus a supervisor to coordinate the movements.
Besides, to stow the cargo on the wings of the hatch as most likely the cargo will be received
at the centre of the hatch, we will need a small forklift or a bobcat plus persons who are
skilled in lashing and securing the cargo. in order to ensure safety to stevedore personnel as
well as to cargo, the process of securing the cargo, hoisting it clear of the ground, lowering it
into the hatch, unhooking the package and landing it on the hatch takes time, not mention
labour. It is this loading time which is painfully slow. The discharge time will also be too
much as the procedure is similar except in the reverse order. Ultimately, the ship spends more
time in the port than in sailing. There is an axiom is shipping that ships earn money when they
are sailing with cargo. They lose money when they are idling or when they sail with no cargo.
Some techniques were tried but could not succeed nor could they delay the blossoming of
containerisation. Since these are of historical interest, we shall see them in brief.
The technology used was called unitisation. If we have similar packages of fairly heavy
weight, the rate of load/discharge will improve. if stack ability is assured, the stowage will be
faster with little broken stowage. Instead of loading drums of 205 litres- an international
standard- if we load 4 drums of same in a pallet duly secured with one another and with the
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pallet, we are handling a package of about 900 kgs which consists of 4 drums. Here load/stow
time is almost same but 4 times the quantity goes in per every cycle, palletisation of drums
and packages of nearly 1000 kgs was recommended which improved the productivity. Surely,
this increases the cost to the shipper who has to palletize at his cost. Also, the freight is on the
gross weight tendered and shipper will have to pay for the weight of the packing material
involved. However, the shipping companies saw the benefit and offered lower freight for the
palletized cargo which was good for both parties.
One more innovative idea was to make the packages and have them preslung. The shipping
company provides slings to be placed around the cargo waiting for the arrival of ship. This
can be done leisurely and is less costly as the vessel is not made to wait for the slings to be put
around the cargo. The loading of cargo is facilitated with the presence of slings and these
slings remain with the cargo while the cargo is on the ship and this again makes it easy for
discharge of the pre slung cargoes.
These techniques did make a difference and yet, the ships were waiting for long times and the
trade was suffering.
Another issue which we saw briefly little earlier, the security of the cargo is suspect even with
any amount of packing as stevedores at both ends handles the cargo. The cargo stays in the
shed (or warehouse) awaiting the ship in the load port and on arrival, the cargo remains in the
port till delivery is taken by consignee. Pilferage or theft is common. This claim was often
laid at the door of the shipping company and here, the shipping company used to bleed badly.
The claim ratio which was the claims per dollar earning used to be 10-15%.
Container shipping solved all these problems and started a revolution.
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Through the 1950s general cargo continued to be handled as break-bulk (on pallet) cargo.
This began to change in 1955. Malcolm McLean recognized that individual pieces of cargo
needed to be handled only twice -- at their origin when stored in a standardized container box
and at their destination when unloaded. He purchased a small tanker company, renamed it
Sea-Land, and adapted its ships to transport truck trailers. The containerisation of world trade
had begun.
As opposed to the transportation of break-bulk cargo, the transportation of containerised
cargo is fast, capital intensive, and relatively inexpensive. While a break-bulk ship often took
a week to unload and reload, a container ship might be in port for only six hours for the same
amount of cargo. Unlike break-bulk ships, most container ships, over a period of time, would
become non-self-sustaining, i.e., having no cargo cranes aboard. Break-bulk ports aspiring
to become container ports would become more capital intensive -- not only investing in
dockside cranes but also in other types of mobile and infrastructure capital. Berths were
redesigned so that container ships could be docked parallel to berths for easier
loading/unloading by dockside cranes. There will be also huge demand on space for stacking
containers, giving delivery and taking in export containers.
Containerisation also radically altered cargo handling tasks, substituting capital for labour.
The demand for dockworkers dramatically declined -- job losses range from 40% to 60% in
many countries. In the Port of New York/New Jersey 30,000 longshoremen were employed in
1970; by 1986 this number had declined to 7,400 dockworkers. U.S. dockworkers, however,
were reluctant to accept changes and negotiated work preservation schemes that led to a
rising surplus of registered dockworkers. This surplus has declined since passage of the U.S.
Shipping Act of 1984 which deregulated U.S. ocean transportation; today, there is a shortage
of registered dockworkers at some ports.
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Elsewhere, the same evolutionary process was on when the dock labour who were highly
organized and unionized wanted to prevent loss of jobs and resisting the onslaught of
containerisation. This happened in India as in many democratic countries and prevented the
full use of the benefits of containerisation for a long time. Containerisation, however, came
slowly as it was an idea whose time had come and nothing could stop it.
Basically, the container was a logical progression in unitization concept except it was a large
unit. Malcolm Marshall saw that as a mutimodal unit rather than a large unit. That was his
genius for his paradigm shift in thinking. The container protects the cargo and theft or
pilferage is avoided. The packing costs are minimised as we do not need sea worthy
packing. The seaworthy packing is a euphemism for protecting the package from rough
handling many times besides protecting the packages from the heeling, pitching and yawing
of the ship during rough passages. The conventional cargo has to withstand the transport from
shippers warehouse to dockside, handling at quay side for loading, stowing in side the hatch
and the actual sea voyage. At disport, it has to undergo handlings in the reverse order.
Insurance costs are lower as it was demonstrated that damage or losses are much less. One
does not have fear tainting by other cargoes as well this cargo tainting other cargoes.
Yet with all these advantages and more, the most crucial difference was the inter modalism
the containerisation spawned. Since time immemorial, the ports were the hub for shipping and
all the hinterland persons had to send the cargo to the port or await the cargo to be received
from the port. Now, the cargo can be sent from your place, your house to the receivers house
no matter where both of you reside. The capability of the containerised shipments to be
booked from house to house rewrote the rules of the game and gave raise to many new players
like NVOCC and new set of documents like MTD which came into being as ocean
transportation is but one leg of the supply chain which connects the shipper and the
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consignee. This is the revolution which created an interdependent world where parts are
sourced from different locations, assembly is done in one location and the product is
distributed worldwide. Supply chains and global logistics have come to stay as
containerisation started encompassing the globe and was making incursions to all internal
points all over. We shall see the progress made as we will discuss these issues later. Suffice to
say for the present that containerisation did make a big impact beyond what its initial
proponents foresaw.
2.1.3.3. Car carriers
We saw, during fifties, there were delays to vessels due to the loading and discharge
operations which were controlled by stevedores in spite of the best efforts and with use of
what ever best technology which was available at that time. This method of lift on and lift off
concept where by cargo is lifted on the vessel and lifted off the vessel at disport was causing
interminable delays. One of the shipping lines started thinking about, during the fifties, a
method to come out of the difficulties. The method was radically different and it was called
RORO. The cargo has to be rolled off and rolled on to the vessel. This is done with
connecting the internal storage area of the ship with the wharf.
At first, wheeled vehicles carried as cargo on oceangoing ships were treated like any other
cargo. Automobiles had their gas tanks emptied and their batteries disconnected before being
hoisted into the ships hold, where they were chocked and secured. This process was tedious
and difficult and could not be used for routine travel. With RORO methods, it was set to
change.
The liner service using RORO vessels will be discussed later as they are similar in service
patterns to that of containerised vessels. RORO vessels are ships with a ramp (an inclined
plane) through which you can roll your cargo into the vessel. This ramp can be a stern ramp or
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can be a amidships ramp. The purpose of the ramp is to make a bridge between the wharf and
the ship which helps the cargo to be rolled on to the ship at loading time and rolled off at
discharge. Basically, this is meant for carrying cars, trucks and such other machinery which
move on wheels, Instead of lifting the cargo with slings, it is better to roll these cargoes as
much damage can happen if these are going to be lifted with slings or any other equipment.
The damage besides, these cargoes on wheels are cost effectively rolled on and off the vessel.
These are specialized vessels which are only meant for mobile machinery and hence these
vessels are fixed most of the time well in advance with specific customers. There are many
types of RORO vessels for very specific uses. To understand the effective productivity of
RORO vessels, 200 cars can be loaded in an hour if all factors are favourable.
The RORO vessel (RO/RO or RORO) derived from the traditional car ferry, where motor
vehicles are driven on and off by their drivers. RO/RO is popular within the European trade
routes. It is also used in other trade routes like the U.S.A.-Central America route and Europe-
West Africa route.
Some modern RO/ROs are designed as a trailer/break-bulk/container carrier suitable for the
deep-sea voyage (long haul), making loading and unloading of containers from the top, like a
full container ship, possible using the crane. The type of cargo that can be carried on a RO/RO
is flexible, including large objects.
The full RORO has low stowage factors, as a result of wasted space around the underside of
the trailers and other motor vehicles. Therefore, the full RO/RO is not ideal for deep-sea
trade. The low stowage factors, however, are compensated for by the quickness of the "turn
around' time in ports in the short-sea voyage (short haul).
In general, the capital cost for a full RO/RO is lower than the full container ship or the LASH.
When the cargo availability is insufficient in a port in the short-sea trade, investment in
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sophisticated container handling installations can be uneconomical. Therefore, the full RORO
offers a solution to short-sea transport needs. A large area of land for parking trailers and
other motor vehicles is necessary while they await loading.
There had been some efforts to take containers using RORO vessels for some areas where no
container terminals exist. The RORO vessels have an internal gantry and have some prime
movers like trailers on which the containers can be loaded and taken to the terminal.
Devanning is done at the wharf and the trailer comes back into the ship with empty container.
This experiment did not succeed much. The Con-Ro vessel is a hybrid between a RORO and a
container ship. This type of vessel has a below-decks area used for vehicle storage while
stacking containerised freight on the top decks. Although some Con Ro vessels do exist, they
are not popular.
2.1.3.4. BARGE CARRIERS
Around the fifties, when shipping fraternity was trying to find answers to various delays and
diseconomies present in the LOLO models, the RORO model was thought of as a possible
solution. Again, someone developed a different model called FOFO model, which is float on
and float off model.
Many problems, often related to the high cost of labour, have changed the economic and
technical natures of shipping. For example, for many centuries materials have been
transported by barges on rivers, lakes, canals, and inland waterway systems to ports near the
river mouth, unloaded there from the barges, loaded onto ocean-going vessels, sent to other
ports across the sea, unloaded there, and reloaded in many instances onto other barges to be
shipped up another river system. In recent years, however, the costs of loading and unloading
cargo have risen higher at an ever-increasing rate. Containerizing of cargoes has helped
somewhat, but even then, as well as in bulk-loaded barges, there has remained the necessity of
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unloading the barges at one port, placing the container and other cargo on a pier, and then
loading from the pier into an ocean-going vessel, only to require the reverse procedure in the
ports to which the cargo is carried by that vessel. All this adds considerably to the ultimate
cost of the product concerned, and the time required for transportation.
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BIBLIOGRAPHY
Competition in Liner Maritime Transport Services: Uniform Regulation, Divergent
Application? (70-93) by Lia I. Athanassiou
http://www.worldshipping.com/index.htm
Research Methodology Book by C R Kothari.
http://www.tiaca.org/images/TIACA/PDF/The%20Changing%20Role%20of%20the%20Freight%20For
warder.pdf
http://www.merchantshpg.com/liner-shipping-services.html
http://www.researchintouse.com/nrk/RIUinfo/outputs/ZC0205_02.pdf