Thursday 15 September 2011

Logistics and Global Supply Chains: The Integration of Ports and Liner Shipping Networks


In 2006, container shipping celebrated its 50th anniversary as an innovation that had a tremendous impact on the geography of production and distribution. Production became globalised by a better usage of comparative advantages while distribution systems were able to interact more efficiently. This paper analyses the mounting pressures on box logistics in light of global supply chains. It will be demonstrated that the basic principle of containerisation remained the same notwithstanding scale increases in vessels and terminals and a clear productivity increase in container handling. Although the container was an innovation initially applied for maritime transportation, the emergence of global supply chains has placed intense pressures to implement containerisation over inland freight distribution systems. Box – containerised – logistics is increasingly challenged to deal with the ever-increasing time, reliability and costs requirements of global supply chains. Imbalances in trade flows and accessibility and capacity constraints are among some of the developments that are making it increasingly difficult to reap the full benefits of containerisation.



Looking back at 50 years of containerisation

In 2006, container shipping celebrated its 50th anniversary as an innovation that had a tremendous impact on production and distribution (Levinson, 2006). It is only with containerisation that production could become globalised by a better usage of comparative advantages while distribution systems were able to interact more efficiently, reconciling spatially diverse supply and demand relationships. Yet, even after half a century, the role of containers in global trade, production and distribution has not been much acknowledged outside groups of academics and practitioners closely related to maritime shipping, rail freight, terminals and logistics.
Container volumes around the world have witnessed tremendous growth in the last 50 years, with an accelerated growth since the mid-1990s. According to UNESCAP (2005), the total number of full containers shipped on worldwide trade routes (excluding transhipment) amounted to 77.8 million TEU for the year 2002, compared to just 28.7 million TEU in 1990. In 2015, the volume is expected to reach 177.6 million TEU. Volumes on the east–west trades (ie Transpacific, Transatlantic and Asia/Europe) and north–south trades are expected to increase at an average rate of around 6% per year. Intra-regional trades, however, are expected to show a significantly higher growth of around 7.5%, mainly as a result of booming intra-Asian trades, but also because of the setting of hub ports acting as points of transhipment for regional markets. Drewry Shipping Consultants (2006) estimates that the total throughput handled by the world's container ports (not to be confounded with the trade route volumes mentioned above) increased from about 236 million TEU in 2000 to an estimated 399 million TEU in 2005 (including empties and transhipment), representing an average annual growth rate of 11%. Transhipment traffic has been the driving force behind growth in container handling in the last decade. In 1980, total container throughput in world ports did not exceed 40 million TEU. In 1990, it reached 75 million TEU. As far as the near future is concerned, worldwide container handling is expected to increase further to 628 million TEU in 2010, of which 57% are port-to-port full containers, 14% are port-to-port empty containers and 29% are transhipment (Drewry, 2006).

Degree of containerisation in a selection of European mainland ports (sorted according to degree in 2005)


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