Container Logistics

The Role of the Container in the Supply Chain

Rolf Neise, Rolf Neise

• Publisher: Kogan Page
• Year: 2018
• ISBN:
  9780749481254
• Edition: 1
• Topic: Business
• Subtopic: Supply Chain Management
• Index: Business

Whilst the maritime container business has been studied in depth, the impact on shippers and how shippers deal with the given challenges has not been fully examined. Container Logistics bridges this gap and looks at the maritime business from a customer's perspective. The book examines the challenges, solutions and the latest developments in the container industry as well as the interaction between the different actors involved, such as freight forwarders, supply chain managers and shippers. Current hot topics from the supply chain and the maritime business perspective are included.From the supply chain perspective, Container Logistics covers areas such as the purchase of transportation services from ocean carriers and transport management, to effective and efficient logistics execution. From the maritime business perspective, the book covers topics such as intermodal freight optimisation and hinterland transportation, and terminal and port optimisation. With the inclusion of clear examples of best practice and bona fide case studies, as well as invaluable contributions from an international team of experts, Container Logistics is an essential guide for supply chain managers and shippers, as well as academics and industry professionals working in the maritime business. Online supporting resources include images from the book and chapter summaries.

PART ONE

The maritime container transportation chain (MCTC)

01

Global container trade – the past and the future

EYDEN SAMUNDERU

International School of Management (ISM), Germany

Introduction

In the last decades, the global shipping container industry has witnessed an unprecedented shift as a result of a dynamic change in the global container trade landscape. Historically, since 1792, containers were transported using rail and horses. Times have changed, and at least 80 per cent of cargo is now ferried on sea. The integration of global economies has facilitated this transformation, in particular the economic trading blocs of the European Union (EU), the North American Free Trade Agreement (NAFTA), the Association of South East Asian Nations, the Southern Common Market (MERCOSUR), and the Economic Community of West African States (ECOWAS). The geographic distance between the participating regional trading partners has been the key underlining reason that countries have forged relationships in order to capture the benefits associated with free movement of goods and services and, of course, the transportation costs. The biggest volume of trade movement has been between the United States of America and the EU, although Europe has significantly benefited from intra-European trade at the regional level. According to World Trade Organization (2014) statistics, trade has fluctuated significantly over the last 20 years because of economic uncertainty that resulted in major crises around the globe, for example the Asian financial meltdown in 1997–98, the Mexican peso crisis from 1995 to 2001, followed by the dotcom bubble burst in 2001 and the global financial crunch in 2007. The global recession saw world exports plummeting to a record low 12 per cent, while world gross domestic product (GDP) took a hit and dropped a significant 2 per cent (WTO, 2015). However, the global economic climate did experience a boom during 2000 through to late 2007, which can be viewed as a typical boom and bust economic cycle. Despite these macroeconomic uncertainties, the USA and China, who are the bedrock of global trading giants, will face tough challenges, as the new American administration is more in favour of a protectionist stance. USA–China trade relations will continue to dominate the global stage as they brace themselves for a new economic world order.

Despite this ‘rollercoaster’ pattern, global trade has also made significant gains. In late 2010 the global export figures made a rebound with a compounded growth rate of 14 per cent in volume terms. But such economic recovery was further hampered by another external shock due to growing geopolitical tensions in the Middle East as the Arab Spring shook the global markets, especially in terms of crude oil price spikes coming mainly from the oil-producing nations in the Middle East. The global economic outlook remained particularly gloomy as the EU experienced a severe sovereign debt crisis that crippled some of Europe’s economies – especially Portugal, Italy, Greece, and Ireland – which saw the economies’ GDP shrinking and further reducing trade-flow at intra-European level and within global markets. Financial bailouts following strict austerity measures aimed to give economic resuscitation to these economies and spillover effects meant that trade flow again was weakened. Even Europe’s powerhouse economy, Germany, witnessed a slowdown in its exports, which resulted in what some experts described as overcapacity of output within its manufacturing sector. In 2009 a majority of container shipping lines took a hit in revenue earnings, recording record losses of a staggering US$1.5 billion (Beddow, 2010). Globa...