Hapag-Lloyd Strategy Presentation

Topics: Containerization, Cargo, Intermodal freight transport Pages: 8 (3451 words) Published: April 11, 2013
Most major companies are now operating in a global level and rely on an effective global supply chain management because their production is based on the smooth circulation of goods. Congested ports and inland transport congestion are becoming significant problems that can hinder the efficiency of global supply chains and can add additional costs to the production and delivery of commodities which will result in shortages of goods in the market and higher prices for the final product. This happens because ports are gateways into continents and from ports goods are transferred to the mainland. As a result a congested port can affect the entire distribution of some products in a wide region. Although traffic in ports was reduced in the past few years due to the economic recession, according to forecasts, the amount of cargo going through ports is going to rise dramatically by 2020, affecting the congestion issues for many ports. (Maguire, A. et al, 2010). Port operations can be subcategorized in three sectors. Firstly, there are the seaside operations where vessels arrive at the port and a berth should be available for the ship to unload or load its cargo. Secondly, there is the yard operation of the port where the cargo is handled and stored after the loading or unloading has taken place. The last sector is the landside operations which connect the yard side with the mainland and it is responsible for managing any incoming or outgoing cargo. (Maguire, A. et al, 2010). Furthermore congestion can be found and in hinterland transport and can have the same impacts as the port congestion has. This paper will identify issues ports are facing according congestion and will suggest appropriate solutions. Financial and Political concerns

Before going in depth on analyzing the specific congestion issues that port and inland transport are facing, some general issues should be addressed first. A common problem is the lack of investment capital. The reforming and upgrading of ports infrastructure is a matter that requires a large amount of funds. It is quite often that ports do not get the funding they need from state agencies. Foreign investments from major companies operating in this field can be many times the solution to ports funding problems. (Bernstein, M. 2006). Another issue is that people do not seem to understand the importance of shipping and they only feel this importance when they experience the lack of benefits derived from shipping. An example is when they start noticing shortage of some specific products in the stores. Thus, people may appreciate a new highway but will not consider very beneficial a new port terminal. This appreciation is seen in politics in some countries where there is a lack of motivation for governments to invest in major maritime infrastructure improvement operations. Education of the general public on the importance of shipping along with the creation of big political campaigns to sensitize governments to provide funds for the maritime and transportation sector are two possible solutions to these matters affecting the shipping industry. (Bernstein, M. 2006). Seaside congestion issues

Sea commerce and transportation of goods are increasing in a global level. Ports around the world are facing exciding numbers of shipments and many times they are unable to cope with this high supply. Two major factors for this increased traffic is firstly the extended use of containerized cargo (Schwitzer, M. et al, 2011) and secondly the fact that Chinese exports have grown dramatically in numbers and as a result their shipments are flooding US and European ports.(Bimco, 2005). An example is that in the first month of 2007, 73 percent of ships carrying container cargo arriving in European ports were delayed due to lack of available berths at their port destination. This percentage is significantly higher than 43 percent of ships arriving late that was reported in 2006. (Mudeva, A. 2007)....
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