shipping facts

CINEC Maritime Campus2014

∗Seaborne trade∗Airborne trade∗Road transport∗Railways ∗Pipelines

Key modes of transport

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Cost Comparison of world transport modes


Global Trend of Shipping


∗ Dry Cargo∗ Container ships

∗ Break bulk ships (General Cargo)

∗ Bulk ships

∗ RORO ships

∗ Liquid Cargo∗ Oil tankers

∗ Chemical tankers

∗ Gas carriers

∗ LPG-Liquefied Petroleum Gas

∗ LNG-Liquefied Natural Gas

Types of ships


A General Cargo ship

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Bulk carriers

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Bulk carriersSmaller ones are generally provided with

cargo gearsBigger ones are gearlessCarry cargoes in bulkHigh speed ships are available

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Container ships

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Container ships

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Under deck

Container ship generations

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Ro-Ro ships

Ro-Ro ships

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Heavy-lift carriers

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Oil tankers

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Gas tankers

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Chemical tankers

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Passenger ships

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Reefer ships

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Car carriers

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Livestock carriers

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Transport & Logistics background of SL

No overseas link through road or railCargo to and from other countries moved

by Sea and Air only Air transport is costlyTherefore ultimate choice for Sri Lanka is

sea transport for export and Import trade

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Location advantage of SL for shipping


Types of Ship Arrivals in Colombo-2013


Source: SLPA/CASA

Birth of Container shippingContainerization was developed after World War IIContainerization

reduced transport costs drasticallyreduced congestion in portssignificantly shortened shipping timereduced losses from damage and theftdisplaced many thousands of dock workers who

formerly handled break bulk cargo.


Evolution of TranshipmentContainers can be

loaded and unloaded, stacked, transported efficientlytransferred from one mode of transport to another

without being opened (From ship to ship, ship to rail, and to trucks)

This Facilitated the Concept of

Transhipment.


Concept of Transhipment


Sri Lanka –the preferred transhipment hub

Navashiva

Cochin

Tuticorin

ChennaiFrom various ports in the world

More feeder ports

To various ports in the world


Due to our geographical location Sri Lanka can serve more than 17 Feeder points in the region


Source: SLPA/CASA

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Source: SLPA

Major Transhipment Volumes 2012


Composition of Domestic Volume of Sri Lanka 2013 (TEUS,%)

Source: SLPA/CASA

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Operational Process in the shipping Industry


Key players in the shipping industry1. Shipping Lines2. Shipping Agents3. Exporters & Importers4. Freight Forwarding and Clearing Companies5. Port Terminals6. Container Freight Stations7. Trucking Companies8. Customs and other border management authorities


Top 20 leading Container liner shipping companies in the world.Source: Maritime Transport Review 2013


X

X

X

X Top 20 lines carry 81 % of Global

container capacity

Key players 1

Shipping Lines calling Sri Lanka with own vessels

RCL (Regional Container L.)SimatechSamuderaOEL/Shreyas(Transworld)Ship.Cor. IndiaDALEmirates Shipping LineFar Shipping

APM-MaerskMediterranean Shp CoCMA CGM GroupEvergreen LineCOSCO Container L.Hapag-LloydAPLHanjin ShippingMOLOOCL

NYK LineHamburg Süd GroupYang Ming Marine Transport Corp.PIL (Pacific Int. Line)K LineHyundai M.M.Wan Hai LinesX-Press Feeders GroupHDS Lines

BTLSt John Cont Line

Liliy LineGold Star Line


Top 3 lines carry 1/3 of Global container

capacity

16 lines carry 72% of Global container

capacity

Shipping lines operate through agents in ports of call


Shipping Agents in Sri Lanka

There are 130 shipping agents in Sri LankaThey maintain very close relationship with their

principalsAgent constantly update the principal about port

performances, policy changes, tariff revisions, weather conditions, political, economical changes

Principals take critical decisions regarding sending ships to Sri Lanka based on information provided by agent

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Key players 2

Why shipping agents are vital for Sri Lanka’s economyLess capital investmentVery high income generated in USDProvide employment opportunitiesShipping lines will take all income out of Sri Lanka if

they have their own offices performing agency functions

While principals have sole interest for their country , the local agents represent the interests of Sri Lanka


Key roles of AgentsAgents market SL ports to attract more services with

shipping lines who are already calling SL portsAgents market to attract new shipping lines to call ports of

SLCoordinate all operational activities with port terminals

including paymentsAdvertise and market for cargo to the line and collection

of FreightCarry out all documentation process with authorities such

as Customs, Exchange Control Dept.


Supply of rations, bunkers, water, spare parts, Lube-oil etc.

Maintaining accounts and remit revenues collected on behalf of principal

Arrival health clearance and other medical assistanceAssist Custom and Immigration formalitiesArrange ship surveysAssist in obtaining various certificates such as “De-ratting”

certificate


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Key roles of Agents

The remuneration to the Agent


Exporters and ImportersDomestic Exporters & Importers contribute 24 % to

the port performance They enjoy high advantage due to wider choice of

shipping opportunities provided by shipping linesOur products can be sold at international markets

due to very competitive freight ratesThis provides opportunities to market low value

commodities in global market


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Key players 3

The process of an export shipment

Exporter make a Booking

Shipping line release an empty container to exporter

Exporter stuff the cargo

Laden container sent to port

Container loaded on boardShip sails to destination


Key players 3


Source: Central Bank of Sri Lanka


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Major Commodities in TEUs

COMMODITY TEUSTEA & COFFEE INDUSTRY 47098GARMENTS & GARMENTS ACCESSORIES 40565

RUBBER & RUBBER PRODUCTS 28870COCONUT & COCONUT WASTE PRODUCTS 19484FIBER & FIBER FINISHED PRODUCTS 15148CEREALS & FOODSTUFF 12159PAPER & PAPER PRODUCTS 12009MINERAL & MINERAL BASED PRODUCTS 7982WOOD & WOODEN PRODUCTS 7934COCONUT & COCONUT PRODUCTS 7536

Exports from Sri Lanka 2013 (Estimated)

The role of Exporter

Exporter• Negotiate Freight rates with shipping line• Booking of Ship space• Prepare customs documentation• Obtain various approvals from local authorities such as Tea Board• Coordinate with container yards to pick up containers• Transporting of containers• Arrange customs inspections• Delivering Laden containers to port

Employees of Exporter

Port Terminal

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Imports to Sri Lanka 2013 (Estimated)


Commodity TEUSCHEMICALS, ACID,PAINTS, PLASTICS,TIN PLATE,FERTILIZER, ADHESIVE & ALLIED PRODUCTS 48736PROCESSED FOODS, FOODS INGREDIENT, FRUITS JUICE, DRINKS,MILK POWDER & TOBACCO 41920GARMENT & GARMENT ACCESSORIES 35847MINERAL & MINERAL BASED PRODUCTS 29925PAPER & PAPER PRODUCTS 29476FRUITS & VEGETABLES 27045MOTOR & HEAVY VEHICLE EQUIPMENTS 22855MACHINERY,VEHICLES, EQUIPMENT, PLANT, TOOL, PARTS & ACCESSORIES 22686STEEL, STEEL PRODUCTS & PARTS 15789

Major Commodities in TEUs

Evolution of Freight Forwarders

In the past the process of an export booking was carried out by employees of the exporting firm

The concept of “Outsourcing” is found more economical to exporters now


Key players 4

Exporter

Negotiate better Freight rates with shipping lineBooking of Ship spacePrepare customs documentationObtain various approvals from local authorities such as Tea BoardCoordinate with container yards to pick up containersTransporting of containersArrange customs inspectionsDelivering Laden containers to port

Freight Forwarder

The intermediately role of FF

Port Terminal

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Port TerminalsAll operational activities for ships are done at port

terminals Vessel berthing & un-berthing Loading Discharging Re-stow

Main container Terminals Jaya Container Terminal (JCT) Unity Container Terminal (UCT) South Asia Gateway Terminal (SAGT) Colombo Intl Container Terminals (CICT)


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Key players 5

Competitive Port Terminal Facilities

Deviation Time in Vessel Fuel Cost Port Access Cost of Total

Port Time Port Deviation Time ($)*** Charges time in Marginal

(Days*) Cost ($)*** ($)*** Port ($)** Cost ($)

Chennai 1.10 1.00 24,750 18,840 28,000 22,500 93,730

Chiitagong 2.25 1.00 50,625 37,800 22,500 22,500 130,925

Cochin 0.13 1.00 2,925 2,184 22,500 22,500 56,109

Colombo 0.06 1.00 1,350 1,006 10,000 22,500 34,858

Dubai 2.37 0.50 53,325 39,816 5,500 11,250 109,891

JNPT / NSICT 0.85 1.00 19,125 14,280 26,500 22,500 82,405

Karachi 1.33 1.00 29,925 22,344 20,000 22,500 94,769

Mundra 1.30 1.00 29,950 21,840 28,000 22,500 101,590

Tuticorin 0.09 1.00 2,025 1,512 33,500 22,500 59,537

Notes : All figures in US$ * At 23 Knots, ** At US$ 22,500 per day for a 4,000 TEU vessel *** At 120 tpd x US$ 140/t{Source: Drewry Shipping Consultants Ltd/SAGT)


Perceptual Mapping forCompeting ports in the region

Port Access Charges

Vessel Deviation Time

Tuticorin

Cochin

Mundra

JNPT/NSICT

Karachi

Chennai

Chittagong

Dubai

Colombo


Container Freight Station (CFS)There are 20 main CFS in Sri LankaShipping agents store containers in CFSThey repair and make sure that containers are

“seaworthy” and suitable to stuff export cargoThey do cleaning, washing, chemical treatments,

fumigation (to kill microorganisms or pests) to containers.


Key players 6

Key roles of Container Freight Station (CFS)

Laden Imports from Ship

Empty container transported to exporter

CFS inspect the container & and store

Repairs & Washing Empty container transported to CFS

Import Laden container transported to consignee

Cargo de-stuffed by Importer

Exporter load cargo and send to port

Import container discharged at port

Sometimes Cargo is consolidated in the CFS

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Trucking CompaniesThere are 104 Container Transport companies

(Members of Association of Container Transporters Sri Lanka )

They provide services to Shipping lines, Agents, Exporters, Importers, Freight forwarders

They transport all containers loading and discharging in Sri Lanka


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Key players 7

The efficiency of shipping also depends on Customs and other border management organizations.


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Customs and Border Management

Key players 8

• Board of Investment of Sri Lanka (BOI)• Ceylon Chamber of Commerce, National Chamber of Commerce - CERTIFICATE OF ORIGIN• Sri Lanka Standard Institution (SLSI), SGS Lanka Ltd -QUALITY CERTIFICATE• Department of Animal Production & Health - HEALTH CERTIFICATE• Department of the Department of Agriculture - PYYTO SANITARY CERTIFICATE• Atomic Energy Authority• Consumer Affairs Authority • Cosmetics, Devices and Drugs Authority• Central Environmental Authority• Ministry of Defense• Telecommunication Regulatory Commission• National Film Cooperation

Sri Lanka World ranking for Border crossing

Connecting to Compete 2014 -The International Bank for Reconstruction and Development/The World Bank

Customs = 84/160

The Global Competitiveness Report 2013–2014 World Economic Forum

Burden of Customs Procedures=70/148 Prevalence of Trade barriers = 105/148

Doing Business 2013 -International Bank for Reconstruction and Development / The World Bank

Trading Across Borders = 56/185

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shipping facts

Education

passenger ships

reefer ships

air transport

sea transport

transport costs

mode of transport

container ship generations

general cargo ship