Asian seaborne trade has roughly
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1 Asia s Ports Chart Global Advancement Course Asian seaborne trade has roughly quadrupled in the last 25 years. Three Chinese mega-ports in particular Dalian, Guangzhou and Ningbo have more than quadrupled TEUs in the last decade. Analysts predict continuing recovery of demand in developed countries, and although demand in emerging economies may fall, it is still expected to outpace growth in high-income countries. As consumer economies take hold in Asia and the southern hemisphere, the balance of trade continues to shift to those areas. To manage whopping volumes and upsized vessels, Asian transshipment hubs are energetically investing in docks, terminals, equipment, draft, inland connectivity, and smart transportation solutions. The evolutionary timeline toward larger vessels has sped up dramatically. Ports and terminals are challenged to make sizable investments in terminal infrastructure at an accelerated rate to be able to accommodate the bigger ships, said Kurt Nagle, president and CEO, American Association of Port Authorities. Port investments that expedite vessel turns and cargo movement are welcomed by carriers looking to continually to improve performance. Delay concerns emerge when there is congestion in ports such as Shanghai, Ningbo, Nhava Sheva and Mumbai, said Rafi Ben-Ari, vice president of shipping for ZIM Integrated Shipping Services. Fortunately, recent announcements will CARGOSMART TRANSFORMS SHIPPING DATA FOR YOUR ADVANTAGE CargoSmart Limited provides global shipment management software solutions that enable shippers, consignees, logistics service providers, non-vesseloperating common carriers and ocean carriers to improve planning and on-time deliveries. Connected to more than 30 ocean carriers, CargoSmart leverages big data sources and a cloud-based platform to offer award-winning sailing schedules, visibility, documentation, contract management, compliance, analytics and benchmarking solutions. BIG DATA TECHNOLOGY CargoSmart monitors a complex interplay of sea traffic metrics, covering 90 percent of the world s ocean container traffic, to deliver unprecedented insights for customers to make better decisions. LEADING-EDGE CLOUD CargoSmart s scalable and secured data management system offers costeffective solutions to fulfill customers business needs and provides a seamless connection with their business networks. EXTENSIVE SHIPPING INDUSTRY KNOWLEDGE Leveraging decades of industry knowledge and experience in vessel operations, CargoSmart helps customers create business value in the age of shipping industry digitization. Launched in 2000, CargoSmart helps more than 130,000 transportation and logistics professionals increase delivery reliability, lower transportation costs, streamline operations and improve collaboration between supply chain associates CargoSmart is changing the way you use digital shipping data, enabling you to be in control of and actively manage your shipments. For more information, please contact a CargoSmart representative today. CONTACT INFORMATION CargoSmart Limited 5/F, Lakeside 2, No 10 Science Park West Avenue Phase 2, Hong Kong Science Park, Shatin, Hong Kong Global Inquiries: U.S. Inquiries: info@cargosmart.com 34 THE JOURNAL OF COMMERCE JUNE
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3 The big carrier alliances that are forcing vast changes to port models in Asia and globally continue to build Far East-U.S. East Coast capacity. provide relief for carriers in some ports. India s Nhava Sheva plans for a deep-sea satellite port north of Mumbai; privately-owned Krishnapatnam one of India s deepest container ports has new stateowned inland rail connectivity; China s Xiamen anticipates a main channel project; Phnom Penh announced a new terminal to support exports to developed markets; and Laem Chabang, Thailand s largest port, has approved an expansion. At Malaysia s Port of Tanjung Pelepas, an investment of more than $400 million will answer new alliance needs for heightened reliability and productivity. China Merchant Holdings (International) continues its global advance in Colombo, Sri Lanka, with a joint venture that will see a half-billion-dollar new terminal investment. In Singapore, a new, $8 billion port will double the alpha city s port capacity to an estimated 65 million TEU. The big carrier alliances that are forcing vast changes to port models in Asia and globally continue to build Far East-U.S. East Coast capacity. In April, industry analyst Alphaliner said that the summer launch of six new strings by carriers expecting continued volume shifts away from the U.S. West Coast would add about 26,800 TEU slots per week to the trade, which would be a 24 percent capacity increase from March. Despite an increasing dominance of the alliances, not all lines are members. With a total of 11 Asia-America services, some of which boast industry-leading transit times, ZIM maintains a strong 36 THE JOURNAL OF COMMERCE JUNE
4 West Coast Strife Upshot Due to the U.S. West Coast port strife in late 2014 and early this year, a portion of Asian freight will permanently shift routing to East and Gulf Coast ports. SPECIAL ADVERTISING SECTION OF THE JOURNAL OF COMMERCE independent presence in the Asian trades. Operating a fleet where the largest vessels max out at slightly more than 10,000 TEUs, ZIM has not yet chosen to trade its enviable operational flexibility for the savings that might come from an alliance membership. It is challenging to offer a unique and efficient service, but ZIM has emerged from a corporate overhaul and is doing just that. These improvements are both on the operational level, improving service reliability, as well as on the commercial and customer service level, which is part of our strategic focus, said Vice President of Sales Nissim Yochai. During the severe disruptions in U.S. West Coast ports, ZIM has proved its strong commitment to customers by responding fast and providing creative solutions, Ben-Ari said. The company initiated customer-pleasing extra loaders via the Suez Canal during the difficult period. The line s new Seven Star Express, or Z7S, followed as a permanent solution. The Z7S offer a particularly speedy gateway for Asian reefer and dry cargo moving over the U.S. East Coast to the Midwest, but ZIM still has big plans for the West Coast. ZIM is well prepared for the new enlarged Panama Canal, and will deploy larger vessels offering more capacity and options to customers. We provide several gateways to U.S. IN FAVOR OF NEAR-SOURCING Carriers and beneficial cargo owners alike need options to combat West Coast port congestion and other supply chain disruptions. This shift filters down through the supply chain all the way back to Asian ports and, ultimately, suppliers. It won t alter their domination of the North American import market any time soon, but has underscored, for buyers, an important benefit of near-sourcing. Some of the supply chain alternatives cobbled together to simply get through the West Coast impasse panned out so well that shippers are signing on for the long term. Having suffered heavy financial losses once, some beneficial cargo owners refuse to be put in jeopardy again and are switching some or all of their cargo to U.S. East and Gulf Coast alternatives. RAMIFICATIONS FOR U.S. EAST AND GULF COASTS Record volumes at certain East and Gulf Coast gateways have continued even after February s return to normal on the West Coast. Georgia Ports Authority reported that Savannah, for example, enjoyed a 27.8 percent increase in March alone (compared to March 2014) a full month after the labor contract problems ended. They also recorded a 15.3 percent increase in TEU volumes for the nine-month period ending in March For many eastern and Gulf seaboard ports some diversions have become conversions. Asian imports made up the lion s share of the diverted cargo. In Jacksonville, Florida, the 2014 year-over-year TEU counts for Asian containerized trade were up 20 percent, reaching a record 272,500 TEUs, or about 2.1 million tons. For a port already deemed the fastest-growing Asian box port on the U.S. East Coast for the last five years, according to PIERS reports, the short-term western impasse provided a fine opportunity to showcase its gateway s supply-chain to new BCOs and commodities. Through Jacksonville, 2014 Asian imports were led by furniture, vehicles and parts, coffee, frozen fish, plastic products, bags and toys. Some analysts are concerned that the labor issue resolution may not be a panacea and that systemic problems related to the arrival of alliance vessels with large cargo volumes needing to be distributed in short windows is unresolved. Certainly, there is room for improvement in West Coast terminal productivity, trucker availability and truck turnaround time, but those opportunities apply through many other North American gateways. THE JOURNAL OF COMMERCE 37
5 At the end of the day, exceptional, innovative carriers still need exceptional, innovative port services. inland. The PNW gateway proved reliable and performed excellently during the West Coast crisis. In addition we offer alternative gateways via Houston, Savannah, New York, Ben-Ari said. Strategically expanding its existing network and smart logistics solutions for Asian trade is an important part of ZIM s strategic model. We are proud of our legacy and look ahead with confidence, said President and CEO Rafi Danieli, as the company celebrated its 70th anniversary. At the end of the day, exceptional, innovative carriers still need exceptional, innovative port services. Automation brings great competitive advantage, and the massive ports of Asia offer exceptional fodder for automation. Finland-based crane and equipment maker Konecranes PLC is a leader in port automation. Asia is the world s most dynamic region, and Konecranes aims to be part of that dynamism, Product Marketing Manager Svend Videbaek said. Automated container handling is already in place in many ports, most commonly with rail-mounted gantry systems. Konecranes also offers automated rubber-tire container yard gantries, a first in the industry. Its Boxhunter RTG product was inaugurated two years ago in Singapore, and is planned for Myanmar. In principle, nothing prevents complete automation of the container terminal, from STS quayside operations to loading of external road trucks taking containers out of the terminal, Videbaek said. In practice, human remote operators currently guide truck loading and unloading in container blocks, while other container moves are completely automated. More automation is coming. A BRIGHTER FUTURE Konecranes is a world-leading group of Lifting Businesses, serving a broad range of customers, including manufacturing and process industries, shipyards, ports and container terminals. Konecranes provides productivity-enhancing lifting solutions as well as services for lifting equipment and machine tools of all makes. In 2014, Group sales totaled EUR 2,011 million. The Group has 11,900 employees at 600 locations in 48 countries. Konecranes is listed on the Nasdaq Helsinki (symbol: KCR1V). Automatic moving and stacking of containers is the next step in the evolution of container crane technology that began with the introduction of containerized shipping in the 1960s. Konecranes automated containerhandling systems offer significant advantages in an ever-more automated industry. Automated container handling is well-established in Automated RMG, or ARMG, container yards around the world. The benefits of automating a container terminal operation are well-known: increased safety, greater productivity and better predictability. With the Konecranes Automated RTG system, these important benefits are brought to RTG-based container terminal operations as well. With this concept, brownfield terminals that currently operate man-driven RTGs or reach stackers can move to automated operation. With a step-by-step approach, the risks of automation are reduced and the terminal can adapt and learn as it goes. In Asia, the automated container handling system of newly inaugurated Lamong Bay Terminal, Pelindo III in Indonesia, is also provided by Konecranes. It consists of 20 Automated RMG cranes, remote operating stations, or ROSs, and associated container yard infrastructure. Konecranes also provided 10 ship-to-shore cranes and five straddle carriers. Handover of the automated container blocks is proceeding smoothly. Konecranes is providing expert engineering support on-site. With its long experience of successful automation projects in the field, Konecranes is in a unique position to deliver automation value to container terminals considering automation in their long-term business planning: the future of your container terminal is brighter. 38 THE JOURNAL OF COMMERCE JUNE
6 Desired redundancy, precise container detection that compensates for fog and dust, canyon driving, container sway elimination diverse container handling objectives related to reliability, predictability and cost are all being addressed by automation. Wherever container traffic grows in future, we can expect to see higher levels of automation coming into play in container terminals, Videbaek said. In May, Indonesia s Lamong Bay Terminal inaugurated a system of automated stacking cranes, remote operating stations and associated container yard infrastructure. It is the next generation container terminal This will be the key to build up business success, by providing reliability, productivity, predictability and safety for shipping line customers, said Prasetyadi, president director of Terminal Teluk Lamong. Digital-age knowledge also builds logistical success. Leveraging shipping industry knowledge using leading-edge data GLOBAL REACH, LOCAL TOUCH ZIM Integrated Shipping Services Ltd. was established in 1945, and has developed into one of the largest, leading carriers in the global container shipping industry. At ZIM, we are committed to providing our clients around the world with reliable, flexible shipping solutions based on expertise gained from over half a century of experience. We cultivate long-term partnerships with our customers to delivering a range of services adapted to meet their specific needs, with the ZIM seal of quality. For ZIM s highly skilled and professional staff, there is no cargo challenge that cannot be met. ZIM s customers enjoy the peace of mind that comes from working with a carrier that offers proven shipping solutions, including out-of-gauge cargo, perishable goods, or hazardous cargo. ZIM remains at the forefront of the carrier industry by rapidly adapting to commercial developments and emerging markets. This approach is an integral part of ZIM s working philosophy, and drives the expansion of our operations in established East- West trade routes, while we pursue the development of our carrier services in the world s newest, most dynamic markets. When your cargo is far from home, it is close to ZIM s heart. At ZIM, we view every customer as a valued individual. As a ZIM customer, you will enjoy the benefits of working with a carrier that is large enough to provide shipping services in every corner of the world, yet small enough to give you the personal attention you deserve. ZIM offers comprehensive account management services delivered by your personal service representative, a professional shipping expert dedicated to anticipating and meeting your needs. This individual approach ensures that you receive firstclass, fully customized services, handled entirely by ZIM, so you are free to focus on your business. ZIM is 32 percent owned by an Israeli corporation and 68 percent owned by financial institutions and shipowners. ZIM shareholders are committed to helping this veteran shipping company fulfill its mission. As we face the future, ZIM is ideally positioned to successfully navigate the global shipping market while remaining dedicated to the delivery of the highest level of customer service. ZIM Delivering on Our Promise 40 THE JOURNAL OF COMMERCE JUNE
7 technologies, Hong Kong-based CargoSmart Limited helps customers unlock business value in the age of digitization. The company monitors a complex interplay of sea-traffic metrics, covering 90 percent of the world s ocean container traffic, to deliver unprecedented insights for business value creation, Chief Commercial Officer Lionel Louie said. Sea traffic metrics and a scalable platform help provide analytics and insights for customers. CargoSmart provides global shipment management software solutions to enable shippers, consignees, logistics service providers, non-vessel-operating common carriers and ocean carriers to improve planning and on-time deliveries, lower transportation costs and streamline operations. Clear information can help logistics managers tackle port congestion, service changes or labor disruptions. The company s offerings include analyses of live sea-traffic to optimize sailing schedule data; a daily Schedule Delay Alert; Clear information can help logistics managers tackle port congestion, service changes or labor disruptions. a Private Label Sailing Schedule solution for non-vesseloperating common carriers; a sailing schedules mobile application with reliability rankings; a segmentable monthly Carrier Performance Insight report; and the Innovating newsletter that reports, for example, cargo delays by port. From July to September 2014, there were nearly 22.5 million global schedule changes, 57 percent of which occurred at Asian ports. Among Asian ports, Singapore had the most schedule changes. Products offering better real schedule visibility are extremely beneficial to the enormous Asian market, helping shippers improve planning and bookings. Comparing performance by port, port-pair, and carrier can be particularly useful. In such competitive Asian markets, carriers, ports and terminals need to find ways to differentiate their services, Louie said. CargoSmart is helping to fill visibility gaps in the ocean portion of shippers supply chains, especially during peak season and times of high port congestion. Innovative products and practices are being propagated, in part, by the sheer size and volume of business moving through Asian hubs. The global shipping industry stands to gain by riding the coattails of ports, carriers and shippers in Asian markets the early adopters who have leveraged their opportunities and are set for success. SPECIAL ADVERTISING SECTION OF THE JOURNAL OF COMMERCE Contact Lori Musser at lori.musser@comcast.net. THE JOURNAL OF COMMERCE 41
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