Module 13: Ocean Transportation INTRODUCTION Ocean Transportation Ocean transport is a method of carrying people, goods and etc

with the means of barges, boats, ships or sailboat over rivers, canals, oceans, or seas. The main purpose of travel by this mean is that it can be for commerce, leisure/recreational or military purposes. There has been very vague information about the origins of ocean transportation. It dates back to 3000 BC ago that the Egyptians employs large boats to transport there cargo across the ocean. The Phoenicians were the first to have a system of transporting goods by sailing vessels over the area of the Mediterranean region. Most goods transported were high value/quality and little volume items such as spices, perfumes, gems, and fine handmade works. Rare items such as ivory, silver, gold and animals such as apes and peacocks were also transported. It wasn't until late in the middle ages that transportation expanded through the oceans stretch of Spain and Portugal. Soon followed was maritime transportation connecting water of Europe and North America where English dominance. This lasted until World War I. Forestry of New England, America promoted construction of sailing vessels made from wood. This made America one of the worlds largest shipping construction country producing schooners and clippers. It wasn't until the late 19th century that they were replaced by steel-hulled steamships. Ships powered by diesel soon replaced steam ship. Meanwhile during the 16th and 17th century in land water transportation grew extensively and we saw construction of canals. The main transport use to cross waters is boats. Boats are relatively small open nautical vessel that propels by sail, oar, by paddling or with the use of a fuel powered motor. It is common that the term "boat" is use to describe larger vessels (ships) which is somewhat incorrect. Boats are smaller and do carry much less people and goods. Ships are larger vessels in which people and goods may be conveyed across water such as ocean, sea and much deeper waters. The most common vessel that carries passengers, and sometimes their vehicles, over short distances or small stretches of water such as rivers and lakes are "ferries". They commonly form part of many waterside cities public transport systems which operate on a schedule time. Water taxi or water buses like those in Venice, Italy are also very popular as they are foot-passenger ferry with many stops. Other passenger vessels are luxury cruise ship, private boats and etc. Large cargo ships and barges are commonly used to carry goods across water. It is usually used to transport large items like cars, big containers and etc. Ocean transportation is a cheaper way in transporting goods compared to air transportation.

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The Container
It was a logical next step that container sizes could be standardized so that they could be most efficiently stacked and so that ships, trains, trucks and cranes at the port could be specially fitted or built to a single size specification. This standardization would eventually apply across the global industry. As early as 1960, international groups already recognizing the potential of container shipping began discussing what the standard container sizes should be. In 1961, the International Organization for Standardization (ISO) set standard sizes. The two most important, and most commonly used sizes even today, are the 20-foot and 40-foot lengths. The 20-foot container, referred to as a Twenty-foot Equivalent Unit (TEU) became the industry standard reference with cargo volume and vessel capacity now measured in TEUs. The 40-foot length container - literally 2 TEUs - became known as the Forty-foot Equivalent Unit (FEU) and is the most frequently used container today.

History of Containerization
Modern container shipping celebrated its 50th anniversary in 2006. Almost from the first voyage, use of this method of transport for goods grew steadily and in just five decades, containerships would carry about 60% of the value of goods shipped via sea. Containerization is a system of freight transport based on a range of steel intermodal containers (also "shipping containers", "ISO containers" etc.). Containers are built to standardized dimensions, and can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to anothercontainer ships, rail and semi-trailer truckswithout being opened. The system, developed after World War II, led to greatly reduced transport costs, and supported a vast increase in international trade The idea of using some type of shipping container was not completely novel. Boxes similar to modern containers had been used for combined rail- and horse-drawn transport in England as early as 1792. The US government used small standard-sized containers during the Second World War, which proved a means of quickly and efficiently unloading and distributing supplies. However, in 1955, Malcom P. McLean, a trucking entrepreneur from North Carolina, USA, bought a steamship company with the idea of transporting entire truck trailers with their cargo still inside. He realized it would be much simpler and quicker to have one container that could be lifted from a vehicle directly on to a ship without first having to unload its contents. His ideas were based on the theory that efficiency could be vastly improved through a system of "intermodalism", in which the same container, with the same cargo, can be transported with minimum interruption via different transport modes during its journey. Containers could be moved i seamlessly between ships, trucks and trains. This would simplify the whole logistical process and, eventually, implementing this idea led to a revolution in cargo transportation and international trade over the next 50 years.

Module 13: Ocean Transportation

Before Container Shipping

People have been trading with each other, even between nations and across oceans, for thousands of years - long before containerization. How did they do that? For many thousands of years, mankind has shipped goods across the oceans, from one land to another. Think of the great seafaring peoples; the Phoenicians, Egyptians, Greeks, Romans, Portuguese, Spanish, British and many more. Sailing the world looking for new treasures, they brought home and traded food, jewels and materials that their countrymen had never seen before. But the process was never easy. The loading and unloading of individual goods in barrels, sacks and wooden crates from land transport to ship and back again on arrival was slow and cumbersome. Nevertheless, this process, referred to as break-bulk shipping was the only known way to transport goods via ship up until the second half of the 20th Century. The loading and unloading of the ship was very labor intensive. A ship could easily spend more time in port than at sea while dockworkers manhandled cargo into and out of tight spaces below decks. There was also high risk of accident, loss and theft. There were some basic systems in place to make the process more efficient, such as the use of rope for bundling timber, sacks for carrying coffee beans, and pallets for stacking and transporting bags or sacks. However, industrial and technological advances, such as the spread of the railways in the 18th century, highlighted the inadequacies of the cargo shipping system. The transfer of cargo from trains to ships and vice versa became a real problem. Before the container shipping industry emerged, boxes of various types and sizes had often been used in transporting cargo simply because they were the logical way to move things en masse from one location to another. However, despite these developments, cargo handling was almost as laborintensive after World War II as it had been in the mid-1800s.

The Birth of "Intermodalism"

Intermodalism is a system that is based on the theory that efficiency will be vastly improved when the same container, with the same cargo, can be transported with minimum interruption via different transport modes from an initial place of receipt to a final delivery point many kilometers or miles away. That means the containers would move seamlessly between ships, trucks and trains. To realize intermodal cargo transport, all areas of the transport chain had to been integrated. It was not simply a question of putting cargo in containers. The ships, port terminals, trucks and trains had to been adapted to handle the containers.

Module 13: Ocean Transportation

The Containership
On 26 April 1956, Malcom McLean's converted World War II tanker, the Ideal X, made its maiden voyage from Port Newark to Houston in the USA. It had a reinforced deck carrying 58 metal container boxes as well as 15,000 tons of bulk petroleum. By the time the container ship docked at the Port of Houston six days later the company was already taking orders to ship goods back to Port Newark in containers. McLean's enterprise later became known as SeaLand Services, a company whose ships carried cargo-laden truck trailers between Northern and Southern ports in the USA. Other companies soon turned to this approach. Two years later, Matson Navigation Company's ship Hawaiian Merchant began container shipping in the Pacific, carrying 20 containers from Alameda to Honolulu. In 1960, Matson Navigation Company completed construction of the Hawaiian Citizen, the Pacific's first full container ship. Meanwhile, the first ship specifically designed for transporting containers, Sea-Land's Gateway City, made its maiden voyage on 4 October 1957 from Port Newark to Miami, starting a regular journey between Port Newark, Miami, Houston and Tampa. It required only two gangs of dockworkers to load and unload, and could move cargo at the rate of 264 tons an hour. Shortly afterwards, the Santa Eliana, operated by Grace Line, became the first fully containerized ship to enter foreign trade when she set sail for Venezuela in January 1960.

The Classification of Containers

Full Container Load (FCL)

A Full Container Load (FCL) is an ISO standard container that is loaded and unloaded under the risk and account of one shipper and only one consignee, in practice it means that the whole container is intended for one consignee. FCL container shipment attracts lower freight rates than an equivalent weight of cargo in bulk. Ideally FCL means the container is loaded to its allowable maximum weight or volume. In practice, the FCL in the ocean freight does not always mean packing a container to its full payload or full capacity. Less Container Load (LCL)

Less than container load (LCL) is a shipment that is not large enough to fill a standard cargo container. The abbreviation LCL formerly applied to "Less than (railway) Car Load" for quantities of material from different shippers or for delivery to different destinations which might be carried in a single railway car for efficiency. LCL freight was often sorted and redistributed into different railway cars at intermediate railway terminals en-route to the final destination. Less Than Carload or Less Than Container Load is a quantity of cargo less than that required for the application of a carload rate. A quantity of cargo less than that fills the visible or rated capacity of an inter-modal container. It can also be defined as "a consignment of cargo which is inefficient to fill a shipping container.

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Other Types of Container Units and Designs for Shipping Cargo

As such, depending on the type of products to be shipped or the special services needed from them, container units may vary in dimension, structure, materials, construction etc. various types of shipping containers are being used today to meet requirements of all kinds of cargo shipping. Some of the most common types of shipping containers in use today are mentioned below. 1. Dry storage container The most commonly used shipping containers; they come in various dimensions standardized by ISO. They are used for shipping of dry materials and come in size of 20ft, 40 ft and 10ft.

2. Flat rack container With collapsible sides, these are like simple storage shipping containers where sides can be folded so as to make a flat rack for shipping of wide variety of goods.

3.

Open top container With a convertible top that can be completely removed to make an open top so that materials of any height can be shipped easily.

Module 13: Ocean Transportation 4. Tunnel container Container storage units provided with doors on both ends of the container, they are extremely helpful in quick , loading and unloading of materials.

5.

Open side storage container These storage units are provided with doors that can change into completely open sides providing a much wider room for loading of materials.

6.

Double doors container They are kind of storage units that are provided with double doors, making a wider room for loading and unloading of materials. Construction materials include steel, iron etc in standardized sizes of 20ft and 40ft.

Module 13: Ocean Transportation 7. Refrigerated ISO containers These are temperature regulated shipping containers that always have a carefully controlled low temperature. They are exclusively used for shipment of perishable substances like fruits and vegetables over long distances.

8.

Insulated or thermal containers These are the shipping storage containers that come with a regulated temperature control allowing them to maintain a higher temperature. The choice of material is so done to allow them long life without being damaged by constant exposure to high temperature. They are most suitable for long distance transportation of products.

9.

Tanks Container storage units used mostly for transportation of liquid materials, they are used by a huge proportion of entire shipping industry. They are mostly made of strong steel or other anti corrosive materials providing them with long life and protection to the materials.

Module 13: Ocean Transportation 10. Cargo storage roll container A foldable container, this is one of the specialized container units made for purpose of transporting sets or stacks of materials. They are made of thick and strong wire mesh along with rollers that allows their easy movement. Availability in a range of colored wire meshes make these shipping container units a little more cheerful.

11. Half height containers Another kind of shipping containers includes half height containers. Made mostly of steel, these containers are half the height of full sized containers. Used especially for good like coal, stones etc which need easy loading and unloading.

12. Car carriers Car carriers are container storage units made especially for shipment of cars over long distances. They come with collapsible sides that help a car fit snugly inside the containers without the risk of being damaged or moving from the spot.

Module 13: Ocean Transportation 13. Intermediate bulk shift containers These are specialized storage shipping containers made solely for the purpose of intermediate shipping of goods. They are designed to handle large amounts of materials and made for purpose of shipping materials to a destination where they can be further packed and sent off to final spot.

14. Drums As the name suggests, circular shipping containers, made from a choice of materials like steel, light weight metals, fiber, hard plastic etc. they are most suitable for bulk transport of liquid materials. They are smaller in size but due to their shape, may need extra space.

15. Special purpose container Not the ordinary containers, these are the container units, custom made for specialized purposes. Mostly, they are used for high profile services like shipment of weapons and arson. As such, their construction and material composition depends on the special purpose they need to cater to. But in most cases, security remains the top priority.

Module 13: Ocean Transportation 16. Swap bodies They are a special kind of containers used mostly in Europe. Not made according to the ISO standards, they are not standardized shipping container units but extremely useful all the same. They are provided with a strong bottom and a convertible top making them suitable for shipping of many types of products.

The Impact of Containerization in Global Trade

o Impact on Port Labor The impact of expanded use of containers was immediately felt by port workers; with the speed efficiencies in loading/unloading meaning fewer workers were required. Studies found that the amount of goods per worker that could be loaded or unloaded with containers, as compared to break bulk, was so much higher as to make nineteen in every twenty men redundant, as Broeze (235-236) puts it. These changes were naturally met with misgivings by workers and their unions, resulting in major struggles between labors and shipping companies that lasted into the 1980s. The ultimate result was tremendous drops in the number of dock workers with examples being the number of registered longshoremen on the U.S. East Coast falling by over two-thirds from 1952 to 1972, and the number of dock workers in the United Kingdom falling from over 70,000 to under 10,000 between the early 1960s and the late 1980s (Broeze 237-238). These changes occurred in spite of worldwide shipping increasing more than 600% from 1950 to 1973 (Brookfield 63). o Impact on Other Technology and Business Practices The nature of dockside labor changed as well, with container operations demanding more technical skills in operating heavy machinery. Standardization of container size and handling attachments meant that the same cargo handling equipment could be used for a huge variety of goods. Moreover, ships could be designed from the start to carry containers. Uncertainty in shipping was also reduced it was easier for a shipping company to calculate the speed of loading or unloading containers than for a similar quantity of mixed goods.

Module 13: Ocean Transportation These advances resulted in further increased investment in ships and shipping companies in the 1970s (Broeze 72-76) and the of creation ever-larger container ships as efficiencies of scale - 5 of big ships, which would be loaded and unloaded rapidly, became evident. As the scale of operations of shipping companies grew, they pursued further integration with land transportation o Impact on Ports and Cities Advances in lowered costs of labor, faster loading/unloading, and increased ship size occurred in parallel with changes in ports themselves. Larger ships required deeper water. But more importantly, containerized trade required more space. Containers are their own storage, so warehouses were not needed at portside. Instead space was needed for the containers themselves and also for the additional volume of trade that lowered shipping costs allowed. In many places, this resulted in shifting of port operations from near city centers to less developed locations. In many cases, the scale of container shipping led to, or at least highlighted, the value of regional cooperation. In California, competition between the ports of Los Angeles and Long Beach for container traffic gave way to more coordination between them in the 1980s (Erie 88-93). In the greater New York City area, the Port Authority of New York and New Jersey has played a key role in such regional coordination. Containerization has contributed to changes in the location of industry and labor within regions as well. The advantage of export manufacturing taking place dockside disappeared as low-- 6 -cost intermodal transportation became available. Instead, manufacturing could spread out regionally into the facilities designed to allow easy access for trucks carrying containers, rather than built up along the waterfront. Such changes were dramatic in New York City, for example, with manufacturing in the city dropping precipitously while container shipping to and from inland locations was booming in New Jersey. o Global Impact and Future Directions But the most profound impact of the container is on the global economy as a whole. Worldwide, by the early 2000s, 300 million 20-foot containers were moved by sea each year, with over a quarter of those shipments coming from China (Levinson 277). As Slack (25)puts it: Globalization and container shipping enjoy a reciprocal relationship. There is little doubt that the expansion of international commerce and the expansion of global manufacturing systems would have been impossible without the efficiencies and economies that containerization has brought. Container shipping is a facilitator of globalization. Globalization is rightfully the subject of much debate. We have seen how containers have reduced employment at individual ports. Beyond that, globalization has resulted in shifting of employment among cities, regions and countries. It has also lowered costs to consumers and enabled delivery of a much wider varieties of goods to many markets. Globalization has affected not only economies but the environment, politics, and culture. The shipping container, a simple technology intended to speed the loading/unloading of goods, has played an important part in those changes.

Module 13: Ocean Transportation

Advantages and Challenges of Containerization Factors

Standard Transport Product

Advantages
Can be manipulated anywhere in the world (ISO standard). Specialized ships, trucks and wagons. Commodities (coal, wheat), manufactured goods, cars, frozen products. Liquids (oil and chemical products) and Reefers (50% of all refrigerated cargo). Reuse of discarded containers. Unique identification number and a size type code. Transport management not in terms of loads, but in terms of units. Low transport costs; 20 times less than bulk transport. Transshipment operations are minimal and rapid. Port turnaround times reduced from 3 weeks to about 24 hours. Containerships are faster than regular freighter ships. Its own warehouse; Simpler and less expensive packaging. Stacking capacity on ships, trains (double stacking) and on the ground. A content of the container is unknown to shippers. Can only be opened at the origin, at customs and at the destination. Reduced spoilage and losses (theft).

Flexibility Usage

Management

Costs Speed

Warehousing

Security

Factors Site constraints

Infrastrature Cost

Stacking

Challenges Large consumption of terminal space; move to urban periphery. Draft issues with larger containerships. Container handling infrastructures (giant cranes, warehousing facilities, inland road, rail access), are important investments. Complexity of arrangement of containers, both on the ground and on modes (containerships and double-stack trains). Restacking difficult to avoid.

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Theft and Losses

Empty Movements

Illicit Trade

Issues between terminal and final destination. 10,000 containers are lost at sea each year. Many containers are moved empty (20% of all flows). Either full or empty, a container takes the same amount of space. Divergence between production and consumption; repositioning. Common instrument used in the illicit trade of drug and weapons, as well as for illegal immigration. Worries about the usage of containers for terrorism.

LOGISTICS MANAGEMENT
(MODULAR APPROACH)

MODULE 13: OCEAN TRANSPORTATION

(WRITTEN REPORT)

SUBMITTED BY:

LEADER:
RECHELLE M. NABAS

MEMBERS:
LORRAINE M. LIM GERALD ANDREW MANALILI DAVID P. DANAO

SECTION:
(HRDM 4-2N)