Sea Transportation Along With Cargo Research Paper

Excerpt from Research Paper :

Sea Cargo and Transportation

Maritime Transportation is the main channel of international trade; however, the share of its weight sustained by the sea is difficult to come across. Increase in population, increasing living standards, quick industrialization, congestion of roads, over-exploitation of local resources, and removal of trade barriers all play a role in the ongoing development in maritime transportation. In nations with passable rivers or long shorelines, or in nations made up of several islands, water transportation might play a vital role in domestic trades, for instance, Japan, Greece, Indonesia, USA, and Norway (UNCTAD, 2004).


The load carrying capacity of the world fleet reached 857 million tons at the conclusion of 2003, which is an increase of 25% over 1890. There was also a rapid growth in the capacity of the container ships fleet with about 727% increase. These substituted the general cargo ships in main liner trades. To a minimal degree, a considerable growth in the bulk carrier fleet is quite noticeable. The gap amidst the increase in the world fleet (25%) and total trade (67%) can be clarified by two factors. First was the increase in the construction of tankers in the 1970s, which lead to the excess capacity in 1980, and secondly, the rising productivity of the world fleet (UNCTAD, 2004).

Generally, the demand and supply of maritime transport services relate with one another to establish freight rates. Whereas there exists numerous factors influencing demand and supply, the exposure of freight rates to the market forces is actually unavoidable. Demand of maritime transport services as well as cargo volumes are normally the first to be affected by economic, environmental, and political instability. Factors like reduction in international trade, natural calamities, sanctions, and regulatory measures and modifications in the costs of fuel have influence on the world economy as well as global demand for seaborne transport. These modifications might rapidly happen and possess an immediate influence on demand for maritime transport services (UNCTAD, 2013). As for the supply of maritime transport services, there is a general trend of congestion in the market, since there are no natural limitations on the quantity of vessels which could be constructed, and that it takes a long period from the time a vessel order is placed up to the time it is delivered, and is set to be used. Hence, maritime transport is quite cyclic and experiences times of constant booms and busts, with its workers enjoying nice incomes or struggling to meet their minimum cost of operation. The maritime division encountered volatile and low cargo rates in its various portions in 2012 as a result of its excess capacity in the global fleet produced by the acute recession in trade during the wake of the 2008 economic and fiscal crisis. The stable delivery of freshly constructed vessels to an already overcrowded market, accompanied by a weak economy, has kept the rates under tremendous pressure (UNCTAD, 2013; Fisenko, 2013).

Port Pricing

The Traditional Approach

Plans of port pricing have a tendency to portray the fact that ports conventionally considered themselves as public infrastructure services providers, which means that the port is open to any ship calling. In addition, there exists no tradition for controlling the approaches to ports. It is usually "first come first served" regardless of the varying vessels' contribution to the income of the port (Persson & Gothe-Lundgren, 2005).

Current Ideas on Port Pricing

The demand for port services varies with the changes in the degree of seaborne trade. The development of the EU internal market is a significant factor in the continuing development. There are both indirect impacts, through trade development and varying trade flows, and direct impacts of the EU policy on transport infrastructure, demonstrated by the Trans European Network (TEN) initiative, the Green Paper on fair pricing of infrastructure, and the Green Paper on port policy (European Commission, 1997). Such variations decrease the influence of national borders on the preference of ports. One outcome might be that more ports shall experience stronger competition. This competition shall come, not just from the surrounding ports, but also from every port that is utilized in other routes via the network (Pouch, 2002; Fisenko, 2013).

Operating Characteristics

The ocean shipping industry possesses control of large volumes of freight amidst continents. Its operational traits entail;

Minimal visibility

In many locations, individuals see aircraft, trucks, as well as trains, but not ships. Globally, ships are not the main means of transportation. Majority of the freight is transported by rail or truck. In addition, research is frequently sponsored by great organizations. Several large organizations manage fleets of trucks; however, only few such organizations manage ships (Ronen, 2002).

Maritime Transportation Planning Issues are Less Structured

In maritime transportation planning, there is a much greater collection in problem structures as well as working surroundings. This calls for customization of decision support systems, which makes them more costly. In current years, it is recognized that there is more attention attracted by the more complicated issues in transportation planning, and this is also portrayed in maritime transportation (Ronen, 2002; Higginson & Dumitrascu, 2007).

There is much more Uncertainty in Maritime Transportation

Vessels might be delayed because of weather conditions, strikes and mechanical issues, and normally because of their high prices, quite minimal slack is built into their schedules. This leads to a regular need for re-planning (Ronen, 2002).

The Ocean Shipping Industry has a Long Tradition and is Divided

Vessels have been existent for numerous years now, hence the industry might be conservative and not welcoming to fresh ideas. Moreover, as a result of the minimal restrictions to entry, there are several tiny, family owned, shipping organizations (Ronen, 2002; Higginson & Dumitrascu, 2007).

Ships Transport a Great Variety of Goods

The goods might be processed consumer goods, intermediate goods, unprocessed vegetables and fruits, livestock, raw materials, and industrial tools, among others. These goods might come in a range of packaging, for instance: bales, boxes, rolls, drums, or might actually come unpackaged. At times freight are unitized into greater standard units like containers or trailers. In the past numerous decades, packaged goods, which required numerous manual handlings, and were conventionally transported by liners, have actually been containerized into standard containers that come in two lengths, 20 and 40 feet (Fisenko, 2013; UNCTAD, 2013). Containerization enhances effective mechanized handling of the freight, and hence saves money and time, and also minimizes pilferage.


Even though vessels are the least controlled transportation means, there are important legal, regulatory, political, as well as economic features entailed in maritime transportation. The control framework of a vessel could be designed to hide the identity of the actual owner so as to reduce taxes and legal responsibility. Liability for shipping accidents might be difficult to identify and damages might not be possible to gather, since multiple legal entities from varying nations are normally entailed, for instance: operator, shipyards, owner, contractors, and surveyors among others. This is actually in addition to the crew, which might have several nationalities and several native languages too (Higginson & Dumitrascu, 2007).

This Code of Practice is vital for the safe packing of freight transport units by those accountable for the packing and protection of the freight and those whose responsibility is to train individuals to pack such units. The Code of Practice details practical measures to guarantee the secure packing of freight into or onto the cargo transportation units. Given this, they are concerned with matters of security and are not intended to handle practical measures to improve security, as such (European Commission, 1997).

A major objective of the EU in the upcoming years is to enhance the efficacy and quality of the European transportation system through shifting traffic to maritime and inland waterways, renovating railways, and connecting the different transportation means (Higginson & Dumitrascu, 2007).

Planning and Management of Sea Transportation

In maritime transportation, strategic decisions cover a broad spectrum, from the outline of the transportation services to the acceptance of long-term contracts. Majority of the strategic decisions are on the supply side, and they include: fleet size and mix, network design, market choice, vessel design, maritime logistic system design, and service network design. As a result of the characteristics earlier discussed, maritime transportation markets are normally competitive and quite unstable with time, and this complicates the strategic decisions (Sherali, Al-Yakoob & Hassan, 1999).

So as to support decisions regarding the optimal fleet of ships for an operator, it is vital to take into consideration the primary structure of the operational planning issue. For the different fleet size and mix problem kinds, planning designs are founded on strategic models. The aim of the strategic fleet size and mix problem is normally to reduce the fixed price of the vessels utilized and the changing operational costs of these vessels. In a strategic routing and scheduling issue, it normally reduces just the operational costs of the vessels. The routing decisions made in a tactical model, however, could be later altered during strategic planning. Moreover, the size of the fleet and…

Sources Used in Document:


European Commission, (1997). Green paper on seaports and maritime infrastructure, COM (97) 678 Final, European Commission, Brussels.


Higginson, J. K., & Dumitrascu, T. (2007). Great Lakes Short Sea Shipping and the Domestic Cargo-Carrying Fleet. Transportation Journal (American Society Of Transportation & Logistics Inc.), 46(1), 38-50.

Persson, J.A. & Gothe-Lundgren, M. (2005). Shipment planning at oil refineries using column generation and valid inequalities. European Journal of Operational Research 163, 631-652.

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