INVESTIGATION ON SPOT BOOKING AND DYNAMIC OCEAN FREIGHT MODELLING FOR HIGHER SPACE UTILISATION ON ULTRA LARGE CONTAINER VESSELS

Bojan Beškovnik

doi:10.21278/brod71404

Abstract

The article deals with the very topical issues of the use of spot ship’s space booking and the dynamic adjustment of ocean freight, according to the demand and availability of cargo space on container ships. Container lines are facing the challenges of filling the growing container ships, which also raises the difficulty of managing the overbooking. Two research hypothesis; that (H1) freight forwarders have concerns about a new spot booking mode and a dynamic way of formulating ocean rates; and that (H2) freight forwarders feel threatened by Container Lines (CL) to some extent to phase them out from the organization of intermodal transport chains due to the introduction of larger ships and the risk of low space occupation, are followed by the research. A survey between freight forwarders and NVOCCs (Non-Vessel Operating Common Carrier) on a global scale provides guidelines for the further development of CL model for the booking process and the formation of ocean rates because the results expose how new ways of working have a greater impact on the operational and commercial work between CL, freight forwarders and NVOCCs. According to the obtained result, the article proposes a three-step approach to be developed by CL that would bring freight forwarders and NVOCCs closer to a new way of working, reduce business risks, and, as a result, provide leverage to achieve ship space optimization and lower space pressure on container terminals. The study provides new understandings in building new operational models for efficient maritime logistics and brings novelty to the scientific community by defining descriptive gaps in changing strategic and operational approach for ship’s cargo space optimization.

Highlights

The maritime industry is facing rapid changes that have a significant impact on the shipping business and the performance of different stakeholders
- Strategy for loading space limitations: Container Lines (CL) offer a lower ocean rate for bookings 4 to 5 weeks before a ship’s arrival, and when the ship is becoming full, the prices are increased; - Strategy for excessive loading slots: CLs offer a lower ocean freight 4-5 weeks before a ship’s E.T.A. but in case of excessive slots available in the last days before the arrival of the ship, it may drop below the level of the rates offered for bookings 4-5 weeks before the ship arrives in an attempt to fill the ship
The remaining 56% of surveyed companies have the possibility of negotiating named account rates (NAC) terms, which are valid for a month or longer

Summary

Introduction

The maritime industry is facing rapid changes that have a significant impact on the shipping business and the performance of different stakeholders. Investigation on spot booking and dynamic ocean freight modelling for higher space utilisation on ultra large container vessels significantly impacts the demand for maritime transport [1]. Carriers seek to mitigate price pressures and rising operating costs resulting from cleaner motor fuels and rising oil prices in global markets by using larger container ships and reducing sailing speeds [2]. They tie into alliances or continue acquisitions to make it easier to fill the space on ULCV (Ultra Large Container Vessels) and reduce the operational cost per container or TEU [3, 4, 5]. Connections allow them to combine direct services between loading and discharging ports that are usually more acceptable to cargo owners [6] and to send ships faster to scrap, allowing the elimination of older and smaller ships, which are more prone to breakdowns and result in higher maintenance costs [7]

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