Transshipment Hub Research Articles

Liner shipping alliances and their impact on shipping connectivity in Southeast Asia

Purpose The liner shipping industry underwent a major round of change between 2014 and 2017 where the concentration ratio of the top ten carriers rose from 64 per cent in 2013 to 82 per cent by 2017. This paper aims to analyze the impact of these developments on the state of shipping connectivity for major container transshipment hubs in Southeast Asia, namely, Port Klang, Singapore and Tanjung Pelepas. Design/methodology/approach The developments in shipping services deployed before and after the latest round of reshuffling in the liner shipping industry were analyzed. Findings Significant service rationalization took place in the period that saw 38 per cent reduction in the number of shipping services called at the ports. Participation in alliance arrangement was revealed to be important for shipping lines to compete successfully on the Asia–Europe trade route in the new shipping landscape. Terminal operators should expect further rationalization of services should overcapacity persist. Maintaining hub status would require the ability to accommodate the strategic, operational and commercial requirements of the entire alliance rather than just focusing on the key shipping line. Originality/value This is the first paper to examine the effects of the latest round of consolidation in the liner shipping industry. In-depth analyses were conducted for shipping services where the service configuration was examined. The case of Southeast Asia and the Asia–Europe trade route was used to illustrate the impact with managerial and policy implications for shipping lines, terminal operators and port authorities.

Transshipment Hub Port Competitiveness of the Port of Colombo against the Major Southeast Asian Hub Ports*

The hub port competition has intensified beyond regional boundaries, resulting in the port of Colombo competing with the Southeast Asian hub ports of Singapore, Klang, and Tanjung Pelepas in the transshipment market. This study analyzes the competitiveness of Colombo as a transshipment hub in “hub and spoke” and “relay” networks. Shipping lines evaluate the selection criteria for transshipment hub ports and the performance of competitive hub ports. The generalized cost approach together with a discrete choice model is used to assess port choice behavior by estimating the transshipment market share of hub ports and analyzing several scenarios. The results reveal Colombo's lack of competitiveness in relay networks and most of the feeder ports in hub and spoke networks, mainly due to its high deviation from trunk sea routes and lower performance in some non-quantitative criteria. Singapore has dominant market share in relay networks and for most feeder ports in hub and spoke networks, mainly due to its high performance in non-quantitative criteria, except Pipavav and Nhava Sheva, dominated by Colombo.

Current status and future operational models for transit shipping along the Northern Sea Route

The Northern Sea Route (NSR) has received increased international attention during the recent years as an alternative transit corridor for shipping between Europe and East Asia. In 2015, the project “Feasibility and Reliability of Shipping on the Northern Sea Route and Modeling of an Arctic Marine Transportation & Logistics System” was established to perform a comprehensive analysis of the current status and future prospects of NSR transit shipping. The project brought together several partners and numerous participants representing industry, governmental bodies, and research groups from Europe, Asia, and Russia, thus providing a unique and comprehensive overview of the subject. This paper is based on the insights gathered during the project. Firstly, it provides a comprehensive overview of the NSR's current regulations and support services. Secondly, it combines the information on the current status of the route with feedback received from the stakeholders during project discussions for the purpose of establishing several possible future operational models for transit shipping along the NSR. It is concluded that the most probable of the analyzed operational models is a combination of ice-strengthened vessels and independent ice-going cargo vessels. This model requires a decrease in severity of ice conditions to allow for year-round commercial navigation, an increase in bunker prices, further development of maritime infrastructure and icebreaking support, and the development of new maritime insurance models. Additionally, establishing transshipment hubs at each end of the NSR with ice-going cargo vessels sailing between them is also considered to be a viable future option.

Transshipment hub port selection criteria by shipping lines: the case of hub ports around the bay of Bengal

With the competitive nature of the liner shipping industry, the transshipment hub port selection process has become complicated with numerous decision-making criteria that need to be considered, and competition between hub ports has accelerated across different regions. The emergence of different liner service networks, such as “hub and spoke” and “relay,” has also intensified the complexity of the hub port selection process. The overlapping of maritime markets simultaneously served by multiple competitive hub ports has offered various hub port choices for shipping lines. Therefore, the criteria for hub port selection for both hub and spoke and relay networks are separately discussed in this study, which evaluates the performances of four competitive hub ports located around the Bay of Bengal: Colombo, Singapore, Kelang, and Tanjung Pelepas. The hub port selection criteria are evaluated based on the monetary, time, port traffic, location, operation, and liner-related categories using a questionnaire survey administered to shipping lines. The results provide a detailed discussion on the significant criteria for both network types and also highlight the dominant performance of the Singapore port and the performance of the other hub ports based on the individual criteria.

A decision support system for integrated container handling in a transshipment hub

The productivity of a maritime container terminal can be improved through a model-driven decision support system (DSS) focused on a better integration among container handling operations occurring across the quay, transfer and yard areas. Integration is pursued to minimize the blocking, locking and other queuing phenomena which are unavoidable, especially when human-operated equipment is shared in a real environment subjected to several random events and activities. An integrated queuing network is proposed in this paper as the natural modeling paradigm for a DSS aimed to highlight and quantify the blocking, locking and other queuing phenomena experienced in real practice. After an in-depth discussion of the limitations of solving the queuing network model analytically, discrete-event simulation is adopted as solution method. Numerical examples referred to a case study for a real transshipment hub return reliable estimates for the above queuing phenomena. They illustrate how the queuing-based DSS may effectively support the operations manager in determining the proper operational policies and equipment management with respect to a proficient integration of container handling operations.

Ports and pests: Assessing the threat of aquatic invasive species introduced by maritime shipping activity in Cuba

Aquatic invasive species (AIS) are biological pollutants that cause detrimental ecological, economic, and human-health effects in their introduced communities. With increasing globalization through maritime trade, ports are vulnerable to AIS exposure via commercial vessels. The Cuban Port of Mariel is poised to become a competitive transshipment hub in the Caribbean and the intent of this study was to evaluate present and potential impacts AIS pose with the likely future increase in shipping activity. We utilized previous assessment frameworks and publicly accessible information to rank AIS by level of threat. Fifteen AIS were identified in Cuba and one, the Asian green mussel Perna viridis (Linnaeus, 1758), had repeated harmful economic impacts. Five species associated with trade partners of Port Mariel were considered potentially detrimental to Cuba if introduced through shipping routes. The results presented herein identify species of concern and emphasize the importance of prioritizing AIS prevention and management within Cuba.

Transshipment hub selection from a shipper's and freight forwarder's perspective.

Transshipment hub selection becomes increasingly important to the global logistics community. From the perspectives of shippers and freight forwarders, a selection must align with cost control strategy and sustain service reliability across cooperative service providers. This paper assesses the selection with the options of both sea and air transports, and from the influence of country of origin of the company. Critical factors of transshipment hub selection, both qualitative and quantitative, are identified through focus group discussions. Relative importance of these factors is determined based on collective views of logistics stakeholders. The competitiveness of transshipment hubs is then assessed using an AHP approach. Our analysis is based on the historical implementation of direct transportation link policy between Mainland China and Taiwan. With this empirical work, the finding suggests that even the spawn of other nearby ports with shorter transport distance and closer proximity to cargo sources, there remain overriding factors such as customs regulations & government policies and connectivity that a transshipment hub is preferred.

Tree based searching approaches for integrated vehicle dispatching and container allocation in a transshipment hub

This study addresses the integration of Vehicle dispatching and container storage location problem with consideration of loading and unloading activities simultaneously. A MIP model is formulated to describe the interrelation between vehicle scheduling, yard crane scheduling and container storage location. A tree structure is used to represent the whole solution space. This representation has a good property as it captures the neighborhood structure and enhances the performance of local search and adaptive searching algorithms. Three variants of tree based searching approaches are developed, namely, the Nested Partitions method (NP), the Beam Search method (BS), and Stochastic Beam Search method (SBS). Extensive experiments show that these proposed methods can find a promising solution in matter of seconds for a practical problem and the Stochastic Beam Search method (SBS) method performs nearly as well as Nested Partitions method (NP) while gaining great computational efficiency. Due to this merit, SBS method is suggested to solve real time integrated vehicle dispatching problem in a relative large scale and may applied in other real time complex system scheduling.

The governance of intermediacy: The insertion of Panama in the global liner shipping network

The paper investigates the emergence of Panama as a major intermediary location in the global liner shipping network and the associated governance changes. From its initial function of a point of transit, Panama became a tollbooth with the setting of the Panama Canal mostly servicing intercoastal networks. Then, with the growth of transpacific trade and increasing ship sizes Panama became a major transshipment hub, a process facilitated by reforms of its port governance with setting of a landlord port authority model and concessions to private terminal operators. With the emergence of Panama as a logistics platform, governance has gone beyond the realm of the port. The setting of a national Logistics Cabinet in 2014 is illustrative of that trend aiming at coordinating the operations of the Panama Canal (with its expanded locks), port activities focusing on transshipment and the setting of port centric logistics zones. Still, the intermediary location of Panama is facing some risk in the post expansion era since shipping lines are no longer forced to use Panama and could elect for other transshipment hubs. In light of the emerging commercial context, it remains to be seen how the connectivity of Panama will fit within global supply chain strategies.

Terminal allocation problem in a transshipment hub considering bunker consumption

AbstractThis article investigates the method of allocating arriving vessels to the terminals in transshipment hubs. The terminal allocation decision faced by a shipping alliance has the influence on the scheduled arrival time of vessels and further affects the bunker consumption cost for the vessels. A model is formulated to minimize the bunker consumption cost as well as the transportation cost of inter‐terminal transshipment flows/movements. The capacity limitation of the port resources such as quay cranes (QCs) and berths is taken into account. Besides the terminal allocation, the QC assignment decision is also incorporated in the proposed model. A local branching based method and a particle swarm optimization based method are developed to solve the model in large‐scale problem instances. Numerical experiments are also conducted to validate the effectiveness of the proposed model, which can save around 14% of the cost when compared with the “First Come First Served” decision rule. Moreover, the proposed solution methods not only solve the proposed model within a reasonable computation time, but also obtain near‐optimal results with about 0.1∼0.7% relative gap. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 529–548, 2016

Shades of grey: the legal trade in CITES-listed birds in Singapore, notably the globally threatened African grey parrot Psittacus erithacus

AbstractThere are few published studies quantifying the volume of wildlife being traded through Singapore. We report on Singapore's involvement in the trade of avifauna listed on CITES based on government-reported data to CITES, with particular emphasis on Singapore's role in the trade of the globally threatened African grey parrot Psittacus erithacus. During 2005–2014 Singapore reported commercial import permits for 225,561 birds, from 35 countries, listed on CITES Appendices I and II, and the export of 136,912 similarly listed birds to 37 countries, highlighting the country's role as a major international transshipment hub for the global aviculture industry. Major exporters to Singapore included the Solomon Islands, the Netherlands, Taiwan, the Democratic Republic of the Congo, and South Africa. Major importers from Singapore included Taiwan, the United Arab Emirates and Japan. Singapore imported significant quantities of CITES-listed birds from African countries, including the Central African Republic, the Democratic Republic of the Congo, Guinea and South Africa, a number of which have a history of abuse of CITES export permits, discrepancies in reported trade data, or an acknowledged lack of wildlife law enforcement capacity. Significant discrepancies were detected between import and export figures of CITES-listed avifauna reported by Singapore and its trading partners. Based on these findings we present three recommendations to improve the regulation and monitoring of the trade in CITES-listed bird species in Singapore.

Models on ship scheduling in transshipment hubs with considering bunker cost

This paper studies a decision problem for scheduling ships׳ starting operation time in a transshipment hub with considering the bunker cost and the transshipment cost of containers. Based on the information about the handing capacity of the container port in each period, the port operator makes a proper decision and informs the shipping companies about the start operation days of each liner route. The optimized decision may help shipping companies significantly reduce the cost. This study proposes a mixed integer programming model. The NP-hardness of the problem is proved. A local branching based solution method is also developed for solving the model. Extensive numerical experiments demonstrate the optimality of the solution by the proposed method is less than 3% for large-scale problem instances.

Container Transshipment and Logistics in the Context of Urban Economic Development

AbstractIt is widely recognised that there are strong relationships between containerisation and supply chains that are giving rise to significant clusters of logistics firms around the large gateway ports, which helps reinforce the status of many as global cities. Recent research, policy documents and regional development strategies suggest that transshipment hubs should be able to develop logistics businesses as well. In this paper, it is argued that the differences between gateway ports and transshipment hubs are very great, and that while the shipping lines have been eager to establish transshipment in many locations, logistics firms are reluctant to follow. A number of reasons for this to be the case are examined, including the long‐term uncertainty of shipping services to transshipment hubs, the costs of stripping containers in hub ports with no scale advantages, the distance from major markets, and the limited volume of actual goods available in most hubs. Empirical evidence is presented to demonstrate the weakness of hubs as logistics centres, the major exception being Singapore. The evidence presented suggests that the economic development potential for cities developing as transshipment hubs is much more limited than suggested in the literature.

Transshipment hubs in the New Panamax Era: The role of the Caribbean

Transshipment hubs are perhaps the most critical component in container shipping networks. Transshipment enables traffic consolidation and the related scale economies in ship size, rationalization of shipping routes and adjustment of ship capacity to traffic density, and expanding the number of ports covered by the shipping network. This paper provides an assessment of the current state of transshipment with a particular reference to the potential impacts of the expansion of the Panama Canal on this activity in the Caribbean basin. While US East Coast ports are expecting an increase in the size of ships deployed on the through-Panama services following the Canal expansion from the current Panamax to post-Panamax ships, it is argued that substituting direct calling by feedering and expanded transshipment activities in Caribbean hubs is more likely. This transformation in service pattern will be gradual, however. In the first period after the expansion the present direct calling is expected to continue, since post-Panamax ships initially deployed on through-Panama services will not differ much than those on through-Suez services already calling the US. The transformation will take place mainly in the second period, 5 to 10 years after the expansion, when larger ships, defined as New Panamax (NPX), which cannot be efficiently handled by US East Coast ports, will be deployed. Accordingly, a substantial growth in transshipment in the Caribbean Region will take place especially during the second period.

Exploring the drivers of port efficiency in Latin America and the Caribbean

We developed a technical efficiency analysis of container ports in Latin America and the Caribbean using an input-oriented stochastic frontier model. We employed a 10-year panel with data on container throughput, port terminal area, berth length, and number of available cranes in 63 ports. The model has three innovations with respect to the available literature: (i) we treated ship-to-shore gantry cranes and mobile cranes separately, in order to account for the higher productivity of the former; (ii) we introduced a binary variable for ports using ships’ cranes, treated as an additional source of port productivity; and (iii) we introduced a binary variable for ports operating as transshipment hubs. Their associated parameters are highly significant in the production function. The results show an improvement in the average technical efficiency of ports in the Latin American and Caribbean region from 52% to 64% between 1999 and 2009; the best performing port in 2009 achieved a technical efficiency of 88% with respect to the frontier. The paper also studies possible determinants of port technical efficiency, such as ownership, corruption and income per capita. The results revealed a positive and significant association between technical efficiency and private port operations.

A Study on improving the Performance of Transshipment Cargo System at the Port of Busan

This study will examine the consolidation that is occurring in the shipping industry and its effects on Busan`s status as a key transshipment hub in Southeast Asia as well as what measures the port must implement to attract transshipment traffic. With this in mind heading forward, trends in transshipment cargo, problems facing the port, as well as the current status of transshipment volumes at the Port of Busan must be fully understood so that thorough research can be done into appropriate measures to stimulate growth and attract cargo traffic. In this study, We analyze the current problems and status of transshipment cargo at Busan Port and factors affecting the competitiveness of transshipment cargo at Busan New Port, Korea`s key import/export gateway, have been examined. We show the Strategies to Attract Transshipment Cargo at the Busan New Port which is to become a an optimal transshipment port, a port`s internal environment including the scale and location of its hinterland, facilities and tariffs as well as the external environment including global networks and logistics IT management must be carefully considered as they are all key actors affecting cargo volumes.

The Role of Sri Lanka in Enhancing Connectivity between South Asia and Southeast Asia

Improving physical connectivity between South and Southeast Asia has long been recognized as a key element in promoting greater trade and investment linkages within the region. As an island economy, Sri Lanka's regional connectivity has been mainly through its main sea port in Colombo, a transshipment hub port for South Asia. Investments to expand capacity at Colombo port are underway as part of Sri Lanka's renewed efforts to develop its infrastructure following the long internal separatist conflict that ended in 2009. Despite significant improvements in physical infrastructure connectivity, Sri Lanka has made only limited headway in strengthening its trade and investment links with the rest of the region. Moreover, the country has seen a sharp decline in its overall exports-to-gross domestic product (GDP) ratio, which is worrying in view of the growing external debt financing of many large infrastructure projects through state-led investment initiatives. Thus, Sri Lanka needs to focus on two priority areas: engaging private investment in infrastructure by strengthening the country's institutional and regulatory environment; and implementing a more strategic trade policy geared to enhance regional integration efforts.

Short-term space allocation for storage yard management in a transshipment hub port

In transshipment ports, the containers to the same destination vessel are usually stored together to facilitate the loading process, which is called the "consignment". During operation, the actual containers that will come in are only known for a short period in advance. Thus, short-term space allocation is needed to assign incoming containers taking into account the transporting vehicles, yard cranes and storage space. Currently, the space is allocated based on the experience of port operators. To balance the current and future impacts of short-term planning, we develop a systematic method called "space allocation given long-term plan (SALP)". The corresponding MIP model is formulated to utilize not only the short-term information, which includes the existing containers and the actual incoming containers, but also the given long-term plan, which provides a forecast of future requirements. The SALP method is evaluated under two storage strategies to achieve consignment, namely, the "non-sharing strategy" and the "flexible space-sharing strategy". The numerical experiments show that the SALP method improves operational efficiency, but its performance is affected by the portion of long-term plan under consideration. The SALP method performs well under both storage strategies when space is sufficient. However, the performance under the "flexible space-sharing strategy" is better than the "non-sharing strategy" when space is tight.

Capacitated Centralized Carrier Collaboration Multihub Location Problem

This study proposes a capacitated centralized carrier collaboration multihub location problem (CAP-CCCMLP) for the small- to medium-sized less-than-truckload industry, with a central entity (e.g., a third-party logistics firm) seeking a set of hybrid collaborative consolidation transshipment hubs to help establish a collaborative hybrid hub-and-spoke network that minimizes the total collaborative costs for the set of collaborating carriers in the system. A mathematical programming formulation is provided for the CAP-CCCMLP and shown to be NP-hard. The model was solved with two-phase tabu search heuristics. Computational runs were conducted to study the efficiency of the tabu search heuristic versus the CPLEX-based solution and the savings obtained through collaboration for different network sizes and maximum number of consolidation hubs. The tabu search heuristic was found to deliver significant computational savings over CPLEX and the optimality gap between the true optimal solution and the tabu search solution was found to be low for most cases. As the expected cost reduction at the shipment level needed to incentivize collaboration decreases, the likelihood that carriers will enter into collaboration increases. If the carriers expect significant cost reductions to enter into a collaborative strategy, the potential savings from the collaboration will decrease.

Integrating multimodal transport into cellulosic biofuel supply chain design under feedstock seasonality with a case study based on California

A multistage, mixed integer programing model was developed that fully integrates multimodal transport into the cellulosic biofuel supply chain design under feedstock seasonality. Three transport modes are considered: truck, single railcar, and unit train. The goal is to minimize the total cost for infrastructure, feedstock harvesting, biofuel production, and transportation. Strategic decisions including the locations and capacities of transshipment hubs, biorefineries, and terminals and tactical decisions on system operations are optimized in an integrated manner. When the model was implemented to a case study of cellulosic ethanol production in California, it was found that trucks are convenient for short-haul deliveries while rails are more effective for long-haul transportation. Taking the advantage of these benefits, the multimodal transport provides more cost effective solutions than the single-mode transport (truck).