The Dynamics in Shipping

Transcription

1 The Dynamics in Shipping

2 Chin Shan Lu Professor, Director, C.Y. Tung International Centre for Maritime Studies Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University Honorary Chairman, Chinese Maritime Research Institute (Taiwan) Associate Editor, Maritime Policy and Management (SSCI) Guest Editor for the special issue on the journals: International Journal of Shipping and Transport Logistics (SSCI) Maritime Policy and Management (SSCI) Transportation Research Part A: Policy and Practice (SSCI) International Journal of Production Economics (SCI) International Journal of Logistics Management (SSCI)

3 The Role of Shipping in Supply Chain Management Supplier Warehouse Raw Material Management (Vendor-Managed Inventory) Physical Distribution (Customer Relationship Management)

4 Client1 Retailer1 Supplier5 Client2 Wholesaler 1 Retailer2 Client3 Supplier1 Factor1 Forwarder Forwarder Customs Broker Retailer3 Client 4 Factor2 Inland Depot Supplier2 Air Port Airline Air Port Client5 Supplier3 Supplier4 Factor3 Inland Depot Customs Broker Sea Port Ocean Carrier Sea Port Rail Wholesaler 2 Retailer4 Retailer5 Client6 Client7 Retailer6 Client8 Logistics Services Providers Forwarder Customs Broker Inland Depot Truck Ocean Carrier Airline Rail Air Port/ Terminal Sea Port/ Terminal

5 Environmental Impact of Shipping i Business GDP & Trade Exchange rate International economic environment International social-cultural environment Oil price volatility International technological environment International political-legal environment Large vessel Social media ISM code, PSC, ISPS, MARPOL, MLC, ECA Natural disaster impact 7-

6 Political-Legal Environment

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8 Strategies Makers

9 Example of the issues of the Arctic ocean shipping routes. Political Ship Finance Economic Maritime Insurance Ship Legal Management Environment Technology

10 Caribbean Epidemiology Centre six Greater Mekong Subregion ) Economic Cooperation Organization The Trans-Pacific Partnership (TPP) in 2005 The Pacific Agreement on Closer Economic Relations

11 The 28 Members of the European Union 11

12 Development of Free Trade Zone Mainland China Korea Taiwan Japan Hong Kong 新加坡

13 Shanghai Pilot Free Trade Zone

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16 What is the Silk Road? At a November 8, 2014 meeting involving the leaders of China, Bangladesh, Cambodia, Laos, Mongolia, Myanmar (Burma), Pakistan, and Tajikistan, Chinese President Xi Jinping announced plans for a new commercial Silk Road. China plans to invest $40 billion in a Silk Road fund a financing mechanism intended to break the bottleneck in Asian connectivity.

17 The Silk Road envisaged by this plan is a network of railways and airports that t will facilitate the movement of goods and products by land across Central Asia, Russia, and eventually to Europe. The network will also include shipping i lanes for goods and products to be transported from South-East t Asia to the Middle East and Africa.

18 The plan involves the revival and linking of key corridors: The ancient Silk Road between China and Europe via Afghanistan and Central Asia The Bangladesh, China, India, Myanmar (or BCIM) corridor The China-Pakistan economic corridor through Pakistan-occupied Kashmir

19 China s Policy Impact

20 The China ministry stated that, with investigations and reviews, it believes that the network formed by this alliance will limit or exclude competition in the Asia-Europe container shipping market. As a result, the ministry made the decision to turn down the application of P3 in accordance with China's Anti-Monopoly Law. As of 1 January, 2014, Maersk Line, MSC and CMA-CGM CGM share 20.6%, 15.2% and 10.9% respectively in the Asia-Europe services, in terms of capacity, and any of the three is bigger than its competitors

21 8/5/2015 IMO & Maritime Affairs 21

22 Economic Environment

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24 World Merchandise Trade, Figures for 2014 and 2015 are projections.

25 Exchange Rate

26 What do you think about the depreciation of Russian Ruble?

27 Oil price impact

28 FFE Forty Foot Equivalent Forty foot container unit 28

29 Oil Price

30 Political Drivers: Clearly there are significant political tensions amongst these oil producing giants and high incentive for the ruling governments to use the price of oil to manipulate each others economies. For example, a falling price in oil is a way to put economic pressure on Russia and its aggression in Ukraine, which h the previous economic embargoes have done little to curb. The oil and gas sector account for roughly 16% of the GDP, 52% of federal budget revenues and over 70% of total exports. Falling oil prices were also directly related to the recent collapse of the Russian ruble.

31 Technology Innovation: The world of oil production has dramatically changed and it is unlikely that OPEC will have the historical ability to independently manipulate oil prices due to the changing role of US shale oil production. By far, the largest factor in the recent drop in oil prices has been the dramatic increase and anticipation of further increase in US shale oil production. The United States now produces close to 9 million barrels per day (bpd), which is about an 80% increase over what we produced in The figure is expected to plow through 9 million bpd, netting the US the most output we ve had in 40 years. Historically, i OPEC is very aware that US producers become less profitable as prices drop below the $60 $70 range and many US companies are just breaking even. So it s clear that the Saudis have an incentive to keep prices low for as long as they can and change the economic incentives of the US oil boom.

32 Technological l Environment

33 International Technological Environment The Internet transcends political, economic, and cultural barriers to reach every corner of the globe Technology presents challenges for global marketers that extend beyond the Internet and other telecommunication innovations Social Commerce Social Network 33

34 Trend of larger vessel

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37 Social and Cultural Environment

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39 Natural disaster impact: earthquake

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41 Japan tsunami Flood in Thailand

42 Costa Concordia disaster partially sank when it ran aground at Isola del Giglio, Tuscany, on 13 January persons died 2 persons missed. 8/5/2015 Safety and Quality 42

43 Ferry disaster in Hong Kong On 1 October 2012, at approximately 20:20, a ferry and another passenger vessel collided off Yung Shue Wan, Lamma Island, Hong Kong. The day was the National Day of People s Republic of China, and one of the ships was headed for the commemorative firework display, scheduledtotakeplace take half an hour later. With 39 killed and 92 injured, the incident was thedeadliestmaritime disaster in Hong Kong since

44 On 17 June 2013, the ship suffered a crack amidships

45 Mediterranean Migrants 8/5/

46 April 2015 Nepal Earthquake 8/5/

47 The 76 meter long four deck river passenger ship Eastern Star (Dongfangzhixing) capsized and sank on the Yangtze River in the Wuhan, Damazhou area on June 2, The vessel was carrying 405 passengers, 5 travel agents and 48 crew on a holiday cruise up the Yangtze from Nanjing to Chongqing when it was struck by a severe storm. The storm with heavy rain and strong winds caused the vessel to capsize and sink within just a few minutes. 8/5/2015 Safety and Quality 47

48 Industry Environment

49 Application :Porter s (1980) Five Forces Model 05/08/

50 Shipping Five Forces Charterer, broker, freight forwarder Supplier Rivalry among existing shipping firms Cargo owner Substitute services

51 World and China GDP? Shipping Operations??? 509 New shipbuilding price index Baltic Dry Index Secondhand price index

52 Bulk Shipping Market

53 The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides "an assessment of the price of moving the major raw materials a by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize, Supramax (BHMI), Panamax (BPI), and Capesize dry bulk (BCI) carriers carrying a range of commodities including coal, iron ore and grain.

54 4 August

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56 Container Shipping Market

57 World Cellular Fleet March 2015

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59 Idle containership

60 TOP 30 Container Carrier Operated fleets as per 10June 2015 Total, there are 6,002 ship active on liner trade, for 19,528,741 TEU and 244,992,317 DWT Including 5,085 fully cellular ships for 19,090,521 TEU Source: Alphaliner

61 Top 30 Container Carriers Operated fleets as per 10 June % Source: Alphaliner

62 Source: Alphaliner

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66 Container Shipping Alliance 66

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68 Source: Alphaliner ( )

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70 The newly announced Ocean Three will be the smallest of the four carrier alliances to operate on the main East West container routes in The alliance s three partner carriers currently deploy 134 ships for Mteu on the Far East Europe E and Far East North America trades. Based on the vessels currently deployed don these two routes, the Ocean Three will have a capacity share of 20% on the FE EuropeEurope trade and 13% on the FE North America trade.

71 The group s capacity share is expected to increase in 2015, with a substantial orderbook of 59 ships of above 8,000 teu currently in place, for a combined capacity of 753,000 teu or some 63% of the group s current capacity deployed on the two main East West trades.

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73 No evidence that Alliances lead to market stability 2M Maersk MSC 2015 Global Alliances CKYHE COSCO K Line Yang Ming Hanjin Evergreen G6 APL Hapag-Lloyd HMM MOL NYK OOCL O3 CMA CGM CSCL UASC (Hamburg Sud) Haven t we seen these before? Past Alliances proved to be fundamentally unstable. Can the new alliances last? 1985 Alliances/Consortiums TRIO OCL Ben Line Hapag-Lloyd MOL NYK ScanDutch Nedlloyd CGM EAC Brostrom MISC ACE K Line OOCL NOL FBS KSC Choyang Independents Maersk Evergreen COSCO Yang Ming Acquired by other carriers Exit liner business

74 2015 deliveries by carrier MSC CMA CGM UASC APM Maersk Maersk Yang Ming K Line CSCL Hapag Lloyd MOL OOCL Evergreen Hanjin Shg Hamburg Süd PIL COSCON APL NYK Hyundai MM M.M. Zim Wan Hai New Vessel Deliveries 2015F (TEU) 0 100, , ,000 CKYHE 19% Other 4% G6 8% O3 34% 2M 35%

75 Container Port Market

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77 In 2014

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80 Top global l terminal operators

81 End of Shipping Dynamics