The Ports Corporation Aqaba - Jordan

The Evolution of Ports in a Competitive World

Impacts of Globalization on Ports: technological changes (1/5)Containerization of world tradeFuture containership designsImpact on port operations:Reduction of ship’s time in port and at berthReduction of personnel requirements for cargo handlingRaise of berth productivityIncrease of capital intensity of port operations

Source Drewry

020406080

100120

1970 1975 1980 1985 1990 1995 2000

Empty Full Total

C o n t a in e r i z a t io n o f w o r l d t r a d e( i n M i l l i o n T E U )

Impacts of technological changes (2/5)Future containership & Gantry Crane designs

Impacts of technological changes (3/5)Need for container port productivity improvements

Impacts of technological changes (4/5) Impact of increasing port productivity on voyage cost per

TEUنقل كلفة قلت الميناء إنتاجية زادت و السفينة حجم زاد كلما

الواحدة الحاوية

“Production” process and time spent in the port

Growing role of information technologyPort requirements for large cruise shipsOther technology impacting port services : podded drive propulsion systems, self unloading bulk

carriers, Sat Information System, Mobile Text Messages with costumers…

Impacts of technological changes (5/5)

Environmental Security and safety concernsGrowing environmental concerns:Oily ballast water dischargeWater pollution, air pollution, aesthetics (appreciation of

beautiful arts), noise.

Issue of sub-standard shipsPort State ControlRegional cooperation

Security Measures: Compulsory Requirements

PORT OPERATIONS AND SERVICE TO CUSTOMERS

•Which markets ?

•What concerns ?

•Which strategy ?

•What expectations ?

PORT OPERATIONS AND SERVICE TO CUSTOMERS

Tramping

Lines

•Operationwise: Usual offer (propose) to shippers.

•Regulationwise

- Open to the public

- Published schedule

- Permanent ports of call

WHICH MARKETS ?

Lines• Mainly involve:

- general cargoconventionalcontainersroro

• Generally eliminate :

- specialised trades

THE SHIP MAKES THE DECISION

WHICH MARKETS ?

WHICH MARKETS ? Lines ’ concerns

• ROUTESThree east/west routes

Some north/south routes

Multiple regional routes

• FINANCIAL STAKES

• OPERATORS10 Shipowners control 50% of the capacity

20 control 72%

12 asian shipowners control 33%

THE MAIN OPERATORS OF CONTAINER VESSELS(October 2002)(October 2002)

Source : www.alphaliner.com

0 50,000 100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

800,000

Pacific International Lines-(40)-Singapour

CSAV Group-(40)-Chili

Yang Ming Line-(70)-Taiwan

Hyundaï-(50)-Korea

Hapag-Lloyd Group-(40)-Germany

China Shipping Group-(54)-China

Zim (87)-Israel

OOCL-(50)-China

Mitsui OSK Line-(70)-Japan

K Line-(80)-Japan

CP Ships Group-(83)-Canada

NYK-(73)-Japan

CMA/CGM-(85)-France

COSCO Container Lines-(135)-China

APL/NOL-(70)-Singapour

Hanjin/Senator-(50)-Korea

Mediterranean Shg Co-(120 M.V)-Swiss

P & O Nedlloyd-(100)-UK/NL

Evergreen-(160)-Taiwan

Maersk-Sealand+SCL-(250)-Denmark

LINES ’ CONCERNS

Financial Stakes Increasing Costs

Variable costs

Logistics

Ship

Voyage

Structure

Decreasing Revenues

FINANCIAL STAKES CostsVariable costs = 43 %

Port operations 10% Maximum

Agency fees

Inland transport

Empties repositioning

Logistics = 13 %

Some logistics costs are considered as variable

Containers2.5 times the ship ’s capacityi.e. 3500 x 2.5 = 8750 boxes => USD 20M

2 sets are needed during the ship ’s lifetimei.e. 8750 x 2 = 17500 boxes => USD 40M

FINANCIAL STAKES Costs

Ship = 23 %

=> Daily costs – Crew + Supplies + Maintenance + Insurance

=> Financial costs –

A 5500 teu ship value is USD 52 M when built in Asia

Return on capital stocks + Resale value

FINANCIAL STAKES CostsVoyage = 14 %

=> Port expenses = Pilot - Tugs - Linesmen - Port dues

=> Suez & Panama

=> Fuel-oil

Structure = 7 %

Management staff

Running costs

Data processing

Control of equipment

Marketing

PORT OPERATIONS AND SERVICE TO CUSTOMERS

Shipowner’s Strategy

•What ambition ?

• What target ?

• How to compete ?What Ambition ?

•Thinking global

• Looking for a niche (suitable place) where nobody came before ! ... alone …but for how long ?

What target ?

• Reducing the slot-cost

• Increasing the net income per box

Reducing the slot-costThe Ship

The Route

A Tailor-made Welcome

Alliances

……………………………………………………………………………………

The Ship

• Capacity teu / tonnage 4 000 teu -> 11,25 USD / TEU 5 500 teu -> 10,90 USD / TEU 6 000 teu -> 10,50 USD / TEU 8 000 teu -> 10,20 USD / TEU10 000 teu -> 9,40 USD / TEU

• Speed: more knot/day -> -> Less days (20-40 knots/hr … High Speed Ships For New Container Ports).

• Number of ships: A fixed day call depends on the number of ships as well as the transit time

• Origine of ships: shipyard / second hand / shipbroker

TRANSHIPMENT

MUCH MORE MOVES !

A

B

200

800

A

B

200

800 + 2 x 200 = 1200

A

B

200

800C

2 x 800 + 2 x 200 = 2000

WHAT EXPECTATIONS ?

Reducing the slot-cost

A Tailor-made Welcome• Rapidity• Reliability

Navigation Equipment

Assistance to the ship

Port Operations Facilities

• Competitiveness

Port Expenses: Negotiable Tarif System !!!

Inland costs

Reducing the slot-costAlliances / Cooperation

=> Slot agreements

=> Consortium

Coordinated servicesIncreasing the net income per box

=> Where is the cargo ?

Which inland network ?

what about the Port Aurthority in this matter ?

How to talk to a customer ? => => The Customer should make his free site visits and introduce his comments, notes, questions and demands.

PORT OPERATIONS AND SERVICE TO CUSTOMERS

• Equipment

• Organisation

PORT OPERATIONS AND SERVICE TO THE CUSTOMERS

WHAT OPERATIONS ?• Men

• Future

MEN

• Number

• Training

• Skills

WHAT OPERATIONS ?

WHAT OPERATIONS ?

ORGANISATION• Internal: social facts

• External: port operators,customs, health control, other professions

EQUIPMENT• Terminals: ports must improve the draft limitations to recieve larger ships which will reduce the transport cost (slot cost). This will improve the port competitivness.

• Interfaces/ Information Technologie + Security

• CranesFast Container Scanning

Sycho – Scan System

FUTURE• Port Reforme & Régulation

• Private involvement (Concessions & Lease Contracts)

• Hi-Tech involvement (equipment, IT Systems)

• New méthode of how to talk to a costumer.

• Commitments & Security

• Ability to receive large ships.

RESULTS ASSESSMENT

• Traffic evolution• Professional Press• Feedback from local agents

PORT OPERATIONS AND SERVICE TO CUSTOMERS

Thank you for your kind attention