Regional Symposium on Services CARICOM Maritime Transportation Services Antigua July 2009 Fritz Pinnock - Caribbean Maritime Institute 1 Fritz Pinnock - Caribbean Maritime Institute 2 The Southern Port on the Red Sea was the envy of several kings of Judah. SOLOMON – built a fleet of ships here which departed and returned every three years. (1 Kings 9-10) JEHOSHPHAT – built a fleet here that was wrecked before it ever sailed (1 Kings 22) UZZIAH – was noted for being the one who rebuilt Elath and restored it to Judah. (2 Kings 14:22) Fritz Pinnock - Caribbean Maritime Institute 4 Noah’s Ark was said to have been the largest sea-going ever built Until the late 19 th. Century when giant metal ships were first constructed. (Genesis 6: 14-16) 450 feet long (137.16 Meters) 75 feet wide (22.86 Meters) 45 feet high (13.716 Meters) Its length to width ratio of 6:1 provided excellent stability on the high seas. Modern shipbuilders say it would have been almost impossible to turn over. TOTAL FLOOR SPACE – 100,000 sq. ft. – more than 20 basket ball courts. CUBIC VOLUME – 1,518,000 cubic feet – capacity of 569 modern railroad stock cars. Fritz Pinnock - Caribbean Maritime Institute 5 GLOBALISATION OUTSOURCING JUST-IN-TIME (JIT) COMPLEX INTERNATIONAL DISTRIBUTION CHAIN Fritz Pinnock - Caribbean Maritime Institute 6 LOGISTICS MANAGEMENT Getting the Right Product …. To the right people … In the right quantity … At the right time … In the best condition … … AND ITS DIVIDENDS Improved access to international markets Increased foreign trade Higher incomes Enhanced employment opportunities Poverty Reduction At an acceptable costs … Fritz Pinnock - Caribbean Maritime Institute 7 PILLARS OF GLOBALISATION SPECIALIZATION TRADE LIBERALISATION INTERNATIONAL TRANSPORTATION TECHNOLOGICAL ADVANCES Fritz Pinnock - Caribbean Maritime Institute 8 TRANSFORMING THE ROLE OF PORTS PORTS AS LINKS IN SUPPLY CHAIN VAL S U P P L Y P R O D U C T I O N T R A N S P O R T •Receiving •Storage •Handling •Inventory •Inspection •Assembly •Labeling •Packing •Order Picking •Bar Coding •Return •Customizing D E L I V E R Y D I S T R I B U T I O N VALUE ADDED SUPPLY CHAIN Fritz Pinnock - Caribbean Maritime Institute 9 Background • Caribbean Maritime Infrastructure is a legacy of Piracy, Slavery and Colonialism. Fritz Pinnock - Caribbean Maritime Institute 10 THE BOX- OPPORTUNITIES??? Fritz Pinnock - Caribbean Maritime Institute 11 Opportunities Value-Added Fritz Pinnock - Caribbean Maritime Institute 12 Driving Forces of Containerization and Multimodal Transport Containerization Unitization Cellular ships Specialized terminals Land consumption Standardization Gantry cranes Transshipment productivity Multi-rate structure Management and coordination Mergers Modal integration Logistics Control over cargo Multimodal operators Through rates and billing Deregulation Multimodal Transportation Fritz Pinnock - Caribbean Maritime Institute 13 Containerization Growth Factors Derived (A) Economic and income growth. Globalization (outsourcing). Fragmentation of production and consumption. Substitution (B) Functional and geographical diffusion. New niches (commodities and cold chain) Capture of bulk and break-bulk markets. Incidental (C) Trade imbalances. Repositioning of empty containers. Induced (D) Transshipment (hub, relay and interlining). A B C Fritz Pinnock - Caribbean Maritime Institute D 14 Fritz Pinnock - Caribbean Maritime Institute 15 Six Generations of Containerships First (1956-1970) Second (1970-1980) Length 135 m Converted Cargo Vessel 200 m Converted Tanker Cellular Containership 215 m Draft <9m < 30 ft 10 m 33 ft 250 m Third (1980-1988) Fourth (1988-2000) Fifth (2000-2005) Sixth (2006-) Panamax Class 290 m Post Panamax 800 1,000 – 2,500 3,000 4,000 275 – 305 m 11-13 m 36-43 ft 335 m 13-14 m 5,000 – 43-46 ft 8,000 397 m 15.5 m 11,000 – 50 ft 14,500 Post Panamax Plus New Panamax Fritz Pinnock - Caribbean Maritime Institute 11-12 m 36-40 ft TEU 500 4,000 – 5,000 16 The Largest Available Containership, 1970-2008 (in TEUs) Fritz Pinnock - Caribbean Maritime Institute 17 Characteristics of Some Historical Containerships Year Name Capacity (TEU) Yard Length (m) Width (m) Draft (m) Speed (knots) 1956 Ideal X 58 US 174.2 23.6 ? 18.0 1968 Elbe Express 730 B&V 171.0 24.5 7.9 20.0 1981 Frankfurt Express 3,430 HDW 271.0 32.3 11.5 23.0 1991 Hanover Express 4,407 Samsung 281.6 32.3 13.5 23.0 1995 APL China 4,832 HDW 262.0 40.0 12.0 24.6 1996 Regina Maersk 6,700 Odense 302.3 42.8 12.2 24.6 2001 Hamburg Express 7,506 Hyundai 304.0 42.8 14.5 25.0 2003 OOCL Shenzhen 8,063 Samsung 319.0 42.8 14.5 25.2 2005 MSC Pamela 9,200 Samsung 321.0 45.6 15.0 25.0 2006 Emma Maersk 14,500 Odense 393.0 56.4 15.5 24.5 Fritz Pinnock - Caribbean Maritime Institute 18 Specifications for Very Large Post-Panamax Containerships Malacca-max (Projected) Emma Maersk Sovereign Maersk Capacity (TEU) 18,000 14,500 8,400 Length (meters) 400 393 348 Width (meters) 60 56 43 Draft (meters) 21 15.5 14 Deadweight (tons) 243,600 156,900 105,000 Speed (knots) 25 25 25 Fritz Pinnock - Caribbean Maritime Institute 19 World Container Traffic, 1980-2008 Fritz Pinnock - Caribbean Maritime Institute 20 Containerized Cargo Flows along Major Trade Routes, 1995-2007 (in millions of TEUs) Fritz Pinnock - Caribbean Maritime Institute 21 Containership Size versus Cost per TEU-Day Fritz Pinnock - Caribbean Maritime Institute 22 Integrated Transport Systems: From Fragmentation to Coordination Factor Cause Consequence Technology Containerization & IT Modal and intermodal innovations; Tracking shipments and managing fleets Capital investments Returns on investments Highs costs and long amortization; Improve utilization to lessen capital costs Alliances and M & A Deregulation Easier contractual agreements; joint ownership Commodity chains Globalization Coordination of transportation and production (integrated demand) Networks Consolidation and interconnection Economies of scale, efficiency and control. Fritz Pinnock - Caribbean Maritime Institute 23 Main Commercial Passenger Aircraft, 1935-2008 Aircraft Year of First Commercial Service Speed (km/hr) Maximum Range at Full Payload (km) Seating Capacity Douglas DC-3 1935 346 563 30 Douglas DC-7 1953 555 5,810 52 Boeing 707-100 1958 897 6,820 110 Boeing 727-100 1963 917 5,000 94 Boeing 747-100 1970 907 9,045 385 McDonnell Douglas DC-10 1971 908 7,415 260 Airbus A300 1974 847 3,420 269 Boeing 767-200 1982 954 5,855 216 Boeing 747-400 1989 939 13,444 416 Boeing 777-200ER 1995 1030 14,300 300 Airbus A340-500 2003 886 15,800 313 Airbus A380 2007 930 14,800 555 Boeing 787-8 2008 1040 15,700 250 Fritz Pinnock - Caribbean Maritime Institute 24 Information technology plays a very important role in the evolution of the container shipping industry. IT controls the “PROCESS” While intermodal integration controls the “FLOW” Fritz Pinnock - Caribbean Maritime Institute 25 EFFECIENCY & ADEQUACY OF THE MARITIME TRANSPORT SERVICE INFRASTRUCTURE OPPORTUNITIES FOR EMPLOYMENT FOR CARIBBEAN NATIONALS STATE OF ENVIRONMENTAL MACHINERY TO PROTECT THE CARIBBEAN SEA BASIN Fritz Pinnock - Caribbean Maritime Institute 26 COMPETING REGIONAL HUB PORTS Fritz Pinnock - Caribbean Maritime Institute 27 CLASSIFICATION OF CARIBBEAN PORTS SOURCE: PINNOCK 2009 Fritz Pinnock - Caribbean Maritime Institute 28 CLASSIFICATION OF CARIBBEAN PORTS CONT. SOURCE: PINNOCK 2009 Fritz Pinnock - Caribbean Maritime Institute 29 TOP CONTAINER TERMINALS & THEIR THROUGPUT (TEU) 2004 TO 2007 Fritz Pinnock - Caribbean Maritime Institute 30 COMPETING REGIONAL HUB PORTS 2007 TEU * Kingston Container Terminal Freeport Port of Spain Point Lisas Rio Haina Caucedo Colon Manzanillo Cristobal Catagena Fritz Pinnock - Caribbean Maritime Institute 31 COMPARISION OF CARIBBEAN HUB PORTS WITH SINGAPORE Port Singapore Kingston Free Port Rio-Haina Cristobal Port of Spain Colon Manzanillo Total area Hectares Equipme nt 339 223 49 25 143 165 62 54 Quay Cranes 125 19 7 3 2 2 5 10 Yard Cranes 338 2 2 4 16 75 50 3 2 4 Straddle Carriers BerthMain 24 4 BerthsFeeder 17 9 Ground Slots 66,454 16,000 Reefer Plugs 3,544 694 2 2 2 Cartagena 103 4 2 52 27 2 7 2 3,300 300 Caucedo 40 Fritz Pinnock - Caribbean Maritime Institute 9,300 500 32 LINER SHIPPING CONNECTIVITY INDEX IN THE CARIBBEAN 1. 2. 3. 4. 5. NUMBER OF SHIPS THE CONTAINER CARRYING CAPACITY IN TWENTY-FOOT EQUIVALENT UNITS (TEU) THE NUMBER OF SHIPPING COMPANIES THE NUMBER OF SHIPPING SERVICES THE MAXIMUM SHIP SIZE (DEPLOYED). Fritz Pinnock - Caribbean Maritime Institute 33 LINER SHIPPING CONNECTIVITY INDEX Country LSCI RANK Dom. Rep. 20.09 48 Jamaica 18.23 52 Bahamas 26.35 60 T&T 12.88 68 Netherland Antilles 8.56 91 St. Kitts & Nevis 6.19 105 Cuba 6.12 107 Barbados 5.36 113 Aruba 5.09 117 St. Vincent & Grenadines 4.52 122 Guyana 4.36 124 Suriname 4.26 126 St. Lucia 4.25 127 Grenada 4.2 130 Antigua & Barbuda 3.82 136 Haiti 3.44 144 Belize 2.32 155 Dominica 2.31 156 Cayman Islands 1.78 160 Fritz Pinnock - Caribbean Maritime Institute 34 EMPLOYMENT OPPORTUNITES FOR CARICOM NATIONALS • • Shipping carries more than 90% of world trade – the bulk of this trade consist of carrying commodities such as oil and grain • - suggest that without shipping half of the world would starve and the other half would freeze. • 100,000 merchant ships are manned by 1 ¼ million seafarers from all over the world. • The feeding and heating of for 6.7 bn. People rest in the hands of just over 1 million seafarers. Fritz Pinnock - Caribbean Maritime Institute 35 • “Never before in the history of mankind have so many depended so much on so few” (Winston Churchill). • Seafarers are professional sea operatives, trained and equipped in the art and technology required in the best practice operation on international waters. Fritz Pinnock - Caribbean Maritime Institute 36 The Philippines account for 20% of the World’s Seafarers (236,431). Today’s ships are automated and highly specialized – the “SKILL MIX” is different. There is a greater need for Deck and Engine Officers – Trend confirmed by the Baltic and International Maritime Council’s (BIMCO) ISF Manpower Project (2008). IMO (2008) - Worldwide shortage of 83,000 qualified officers. Threat to the Philippines ratings come from the lower priced competition from Asian neighbours such as China, India and Viet Nam. Fritz Pinnock - Caribbean Maritime Institute 37 8.7% SR. OFFICERS 236,431 19.1% JUNIOR OFFICERS 72.2% RATINGS Fritz Pinnock - Caribbean Maritime Institute 38 Philippines seafears sends back US$1.7 Billion or 16% for the first 9 months of 2005. Since this is a significant source of income for the country the government – Set up a “one stop shop” for easier and speedier processing of documents that are handled by over one dozen government agencies. Prepare new ID Cards with Bio Metric features as an anti-terrorist measure. Social Security coverage – now mandatory. BIMCO estimates that shortage of officers will increase to over 25,000 by 2011. The new ILO Convention will help to make the profession more attractive: New condition on work environment. Minimum age for work aboard ship. Hours of work. Occupational health and safety. Fritz Pinnock - Caribbean Maritime Institute 39 Caribbean Hurdles • • • • • • • • • Caribbean freight rates 2 – 3 time higher than the world average. Small parcel size Service economy For every 9 containers coming to the region – only 1 return with Cargo. Role of Customs – Revenue Collection and not trade facilitation. Port infrastructure built to accommodate general cargo vessel and not container cargo. Restrictive labour practices. (overtime, guarantee pay). Competition - cruise and cargo vessels for berthing space. Trade Community System – Integration. Fritz Pinnock - Caribbean Maritime Institute 40 Environmental Challenges Fritz Pinnock - Caribbean Maritime Institute 41 Fritz Pinnock - Caribbean Maritime Institute 42 Fritz Pinnock - Caribbean Maritime Institute 43 Fritz Pinnock - Caribbean Maritime Institute 44 Fritz Pinnock - Caribbean Maritime Institute 45 Fritz Pinnock - Caribbean Maritime Institute 46 Fritz Pinnock - Caribbean Maritime Institute 47 Fritz Pinnock - Caribbean Maritime Institute 48 Fritz Pinnock - Caribbean Maritime Institute 49 Fritz Pinnock - Caribbean Maritime Institute 50 Fritz Pinnock - Caribbean Maritime Institute 51 ENVIRONMENTAL CHALLENGES • The Caribbean sea is a homogenous area shared by all islands. Need for collective legislation – to achieve environmental sustainability. • 50% of global cruise ship deployment. • Need for harmonisation of legal framework for regulation of shipping industry: Fritz Pinnock - Caribbean Maritime Institute 52 • Ratification/accession to all the major international treaties governing safety, security and pollution prevention by all states. • With the assistance of the office of the IMO Regional Maritime Advisor ensure that legislation which is promulgated is harmonised. This will prevent especially cruise lines from playing one Caribbean island against another – (stringency of their laws) • Harmonise the level of the sanctions (penalties) in the legislation. Fritz Pinnock - Caribbean Maritime Institute 53 Fritz Pinnock - Caribbean Maritime Institute 54 • Establish a regional policy on the management of ship-generated waste and establish adequate reception facilities for such waste. • Have matters relating to the regulation of cruise shipping as standard agenda item in CARICOM. • Carry out training of enforcement agencies, prosecutors and judiciary on matters relating to shipping (cruise & cargo). Fritz Pinnock - Caribbean Maritime Institute 55 • Carry out gap analysis on the equipment and other needs for testing and sampling – share acquisition, maintenance and operation of such equipment shared regionally. Fritz Pinnock - Caribbean Maritime Institute 56 Fritz Pinnock - Caribbean Maritime Institute 57 Fritz Pinnock - Caribbean Maritime Institute 58 Fritz Pinnock - Caribbean Maritime Institute 59 Fritz Pinnock - Caribbean Maritime Institute 60 Fritz Pinnock - Caribbean Maritime Institute 61 Fritz Pinnock - Caribbean Maritime Institute 62 CAUCEDO PORT Fritz Pinnock - Caribbean Maritime Institute 63 RIO HAINA PORT •Busiest port in the Dominican Republic. •Berth length: 700 meters •Depth: 33 feet. •Equipment: 3 gantry cranes, maximum payload: 40 tons. Other equipment, such as payloaders, forklifts, motorcranes, etc. Fritz Pinnock - Caribbean Maritime Institute 64 Fritz Pinnock - Caribbean Maritime Institute 65 Fritz Pinnock - Caribbean Maritime Institute 66 Fritz Pinnock - Caribbean Maritime Institute 67 Fritz Pinnock - Caribbean Maritime Institute 68 Fritz Pinnock - Caribbean Maritime Institute 69 Fritz Pinnock - Caribbean Maritime Institute 70