Promoting efficiency in shipping

Abstract

Technological change in freight transportation has become pervasive and irreversible. The rate of technological obsolescence has more than doubled in the last 20 years, and there is little evidence of a slowdown in this trend. At the same time, the world has become increasingly dependent on international trade. Developing countries are no exception to this trend, but their trade is mainly with developed countries, whose transport technology is usually more advanced. The effective management of technological change involves the choice, timing, scale of introduction, and rate of utilization of new technology. Few in maritime transport know how effectively to deal with these problems. As a result, we often experience ineffective management of technological change; with technology sometimes introduced on the verge of obsolescence, inappropriate technology chosen, or use of new technology made difficult because of lack of training or other manpower resources. Effective technological change usually requires changes in organization, management, and control of port and shipping systems. Today we are faced with large changes in trading patterns, as well as in the physical form in which commodities are traded. Ports and shipping therefore often find themselves with the wrong capacity or technology for their trade. Efficiency in ports and shipping, in addition to the use of appropriate technology, requires effective management, operations, and maintenance. This in turn can only be achieved by an effective match of technology, user requirements, operational procedures, maintenance, etc. Ports operate in an increasingly competitive environment and can no longer rely on their traditional ‘monopoly of service’, nor can shipping rely on protectionism for cargo. Efficiency improvements in ports and shipping are the result of changes in technology, institutional structure, work rules, human relations, training, and incentives. Technological change in shipping has been a gradual process induced in the past by profit incentives and exogenous factors such as ship safety and environmental regulations. Nowadays such changes are more often forced by interand intra-modal competitive pressures, changes in user demand, and in interface technology. Technological changes are now much more frequent and in the future will be more radical. Management of technological change will be the most important function of port and shipping management in the future.