Shipping A Cog in the

Logistics and Supply

Chain Wheel
By:
Capt. Srinivas Venkatesh M.I.C.S
Business Student
SP Jain Center Of Mangement Singapore

Introduction to the World of

Merchant Shipping
History
Phonecian Merchants of the Mediterranean
Steam propulsion and use of Iron in shipbuilding
Opening of the Suez Canal in 1869

Importance of Sea Trade

- Accounts for carriage of 90% of world trade
Life Blood of Global Economy
Variety of Products Transported daily
A service that runs 24X7 round the year
Various types and sizes of vessels deployed

Some Interesting Facts

First Merchant Vessel A combination of
logs dates back to more than 15000 years
Largest Tanker ULCC Knock Nevis
previously called Jahre Viking 459m long
Largest bulk carrier afloat 3,65,000 DWT
Largest Container Ship Emma Maersk
396.85 m/15000TEU/31 knots sea speed
Cost of building a ULCS 145 million USD

Economics of Sea Trade

Shipping as a Derived Demand

50000 merchant vessels deployed

Market is cyclical in nature

Volatility in Freight rate seen often

Demand and Supply

Where the ships ply

Types of Shipping Trade

Importance
Tanker

of Dry & Wet Trade

Trade

- Carriage of a variety of oil products/chemicals/gasses

- Major exporters- Middle East, North Sea, South America, West Africa
Liner

Trade

- Carry manufactured goods through scheduled liner services

- Leading terminal operators PSA, DP World, APM Terminals

Bulk

Trade

Carry raw materials and bulk commodities Iron ore, Steel

General

Cargo Trade A thing of the past; being replaced by containerization

Shipping in the Logistics

Domain
The mission of Logistics Management
- Planning and coordination
- Required Service levels at lowest possible cost
- Ensuring economies of scale are achieved
during bulk transportation

The Role of 3 PLs

Expertise in providing logistics solutions to
clients
- Multimodal Transportation
- Networking with service providers

Shipping as an Element of the

Supply Chain
Supply Chain processes
Sourcing of raw materials
Distribution of finished products
Pipeline Visibility Customers perspective
Enhancing the value chain by better
coordination
Two sides of a coin- The Operators view

Business Challenges facing the

Industry
Recessionary Trends
Limitations of Sea Transport
Optimizing space utilization
Reducing fleet size and reducing excess
tonnage
Planning of fleet deployment by forecasting
Understanding customer demand and
ability to use resources efficiently

From a Logistics and Supply

Chain Managers perspective

Transportation decisions
Choosing the right mix
Availing discounts on bulk movements
Learning to make choices in difficult
situations
Network Optimization
Using Ocean Transport in conjunction with
other modes
Understanding Limitations of Sea Transport

Future of the Industry

Logistics Infrastructure to match growth
Globalization Logistics trends worldwide
Oil movements Refining capacities
Drop in container trade globally
Forecasts for trade recovery
Oversupply expected due to orders for new
buildings in shipyards
Reducing the tonnage seen as the only
alternative to reduce the imbalance

THANK YOU
Q&A