There’s a new alliance– THE alliance! It’s signed, it’s for five years, and it seems real, though anyone may back out. What’s interesting is their announced commitment to integration beyond the port. We’ll see how that works out. No sign yet of what they actually plan to do in that area.
THE Alliance formed of Hapag-Lloyd, Hanjin, K Line, NYK, MOL and Yang Ming, with Hyundai out in the cold
Posted in Logistics, Shipping, Supply Chains
Tagged alliances, container shipping, intermodal, Logistics, ocean shipping, ports
John Edmonds of Freightos sent me this history of the shipping container in time for the 60th anniversary of the first container shipment, the Ideal X, on April 26th.
I found it useful reading. It never hurts to remind ourselves of the disruptive effect mass acceptance of a standard has on coordinating efforts in an industry. We see it over and over in high tech, energy, autos, manufacturing.
Of course some standards fail to be accepted (for instance, beta video tape), and fall by the wayside. But we cannot advance if we do not try; that is the nature of disruptive entrepreneurial behavior in business.
Such is the dilemma facing ocean carriers and alliances today. Perfect competition will not yield profit; the surplus will go to those with critical inputs. Instead the pie must be made bigger by coordinating efforts through standards. This will inevitably create niches in which particular firms can survive nicely by adding their special value.
A comprehensive history of the freight shipping container; its creator, Malcolm McLean; and how it’s driven the industry, the global economy, and more.
Posted in Logistics, Shipping, Strategy, Supply Chains
Tagged container shipping, disruption, entrepreneurship, intermodal, Logistics, standards
This study is provocative, but may not tell the whole story. It is not clear to me that productivity should fall in direct proportion to the size of the call. That’s a rough approximation, and captures the direction, likely. But I suspect a nonlinear effect. It’s basically a scheduling issue, and scheduling response rates are notoriously nonlinear.
It is complicated by the fact that a ship is usually only able to be scheduled at one terminal, even though another terminal may have excess capacity and be able to handle it exactly on time. That depends on the degree of cooperation possible among terminal operators. An interesting study would be to look at calls at a single port with multiple terminals and see how often there is a berth available for an ULCV but the specific ship cannot use it because it is required to use a different terminal.
I don’t see an easy way for port management or terminal management or ocean carriers and alliances to solve that one.
That said, I agree with the conclusion: it’s not mega-calls. I don’t think we should be blaming the mega container ships for the problems. Those ships will come, so ports need to innovate. A goal like 6000 moves in 24 hours is reasonable.
New analysis suggest that port productivity levels are dropping, but ultra-large container vessels are not at fault
Posted in Ports, Shipping, Supply Chains
Tagged big ships, container shipping, intermodal, productivity
Supply Chain Digest Port Technology International Marine Link
Supply Chain and Logistics 