ma-thesismandy xu final

8/11/2019 MA-ThesisMandy XU Final

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A Research of Performance of Logistics

System of Port of Shanghai and

Rotterdam

Man. Xu

328784

Super isor!

Mr.M "i#dam MSc$rasmus %ni ersity Rotterdam

%r&an' Port and (ransport $conomics

)cto&er 2*++


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A&stract

The main purpose of this thesis is to evaluate the current situation and potential of Port of

Shanghai and Rotterdam in terms of the performance of port logistics systems. Each ports

has their strengths and ea!nesses in the logistics system. As a result, this paper sho a

comparison of t o ports that the performance of the port logistics systems is being evaluated

by different factors. These are infrastructure, logistics services, border procedures and time

and reliability of Supply hain. The study also emphasi-es the port s important role in the

logistics development hich describing the changing role of the ports from traditional

transport hub to value/added logistics center.

0ey ords1 Port, 2ogistics systems, Supply hain, Performance

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List of (a&,es

Table ' . "rom "ordism to post/"ordism

Table *1 The classification of 2ogistics Performance

Table ( 1 Attributes of port logistics systems performance

Table 3 1 #easurements of t o ports centrality in 4#$

Table 51 Port charges of t o ports

Table 61 omparison of production of t o ports

Table 71 omparison of t o ports clearance time and services

Table 81 The container ship turnaround time in t o ports

List of -igures

"igure '. Evolution of import related logistics concepts

"igure *. Emergence of distribution related logistics concepts related to managerial focus

"igure (1 The location of container terminals of Shanghai Port

"igure 3. 2ocation of the distripar!s in the Port of Rotterdam

List of A&&re iations

TEU 1 T enty/feet E9uivalent Units

"T: 1 "ree Trade :one

;RT 1 ;ross Registered Tonnage

$RT 1 $et Registered Tonnage

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(a&,e of contents

Preface

A&stract

List of (a&,es

List of -igures

List of A&&re iations

(a&,e of contents

hapter + / 0ntroduction

'.'


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(.( )peration

(.3 Reliability of Supply hain

(.5


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hapter + 0ntroduction

+.+ ac ground

The ongoing development of global trade has significantly increased the demand of shippingindustries hich has e&perienced steady gro th during the past fe decades. #ost of

developed countries or regions o n seaports. Port as an very important sector of maritime

transport has e&isted for some thousand of years. It used to act as a simple transshipment hub

here freight passed bet een ships and landside transport as a result of its geographic

element and transshipment function.

According to Stopford >'??7@, a port is a geographical area here ships are brought alongside

land to load and discharge cargo/usually a sheltered deep ater area such as a bay of a river mouth.


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+.2 Pro&,em ana,ysis

There has been done some researches related to this sub%ect. These reports investigated the

role of port in global supply chains and the opportunities to attract ne economic activities in

logistics. The central arguments of this thesis is that ports have to reform its role ith the

evolution of logistics concepts.

oming from the problem introduction above, it is possible to define the main ob%ective of

this thesis1

To e&amine traditional, current and emerging roles played by ports in the conte&t of

logistics and supply chain management. To dra lessons from the top port of each

region.

The main research 9uestion is derived from the ob%ective. The follo ing research 9uestion

has been formulated for this research1

4hat is the role of Port of Rotterdam and Shanghai in each logistics industry, and

Bo is the performance of logistics systems in each portsC

4hich can be divided in the follo ing sub/9uestions1

Bo does the seaports logistics developC

4hat is the ma%or trends of maritime logistics industryC

4hat is the ma%or trends of port developmentC

4hat are the components of the gate ay port and hat factors are of influenceC

Bo does port classify in function, operation and administration perspectiveC

4hich level does Port of Shanghai and Rotterdam stay inC

=oes the Port of Shanghai be a orld/class port in the orld ideC

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+.3 Methodo,ogy

The main ob%ective of this thesis is to ma!e an analysis of Port of Shanghai and Rotterdam in

terms of the performance of logistics systems. This ob%ective specifically includes analysing

the Port of Shanghai in terms of port infrastructure, technology information, connecting

transport system and efficiency of operation of logistics. In order to come to a ell structured

analysis I used literature, articles, boo!s and the !no ledge of the past years.

All the research 9uestions in this thesis are ans ered by conducting a case study combined

ith an literature study. The literature study is used to identify and analysing trends and

developments in port and logistics. "urthermore, in the literature revie , a scarcity of

research concentrating on the evolution of the role of ports in line ith the changing of

logistics concepts.


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hapter 2 Literature re ie1 of port studies

2.+ 0ntroduction

This chapter gives an overvie of the literature that has been published by different scholarsabout the role of port positions in logistics and supply chain management. The purpose of this

literature revie is to provide a better understanding of hy and ho the changes in

international trade, transport and shipping affected logistics industry, and then ho port

management model changed ithin this changes. "irst, ma%or trends in the maritime transport

and liner shipping net or! are discussed to get a better understanding of ho global maritime

net or!s developed. Boffmann >'??8@ has ritten about changes in maritime logistics. Be

discussed about ho hub/spo!e net or! turns out. Also, $otteboom and 4in!elmans >*++'@

have ritten about these changes ithin the development of logistics and about ho the role

of port changes to face those challenges. Second, =e 2angen and van der 2ugt>*++5@ have

contributed to the e&isting literature about the role of port developed ith the evolution of

logistics concepts. They noted that the multinational function of ports ere diminished and

replaced by logistics activities ith a more regional function and stronger integrated ith

production activities.

2.2 hanges in g,o&a, maritime en ironment and ,iner shipping

;lobali-ation and transport revolutions has become a central issue for almost all segments of

industries at a global scale>"riedman,*++5@. The booming of global trade needs more

capacity in freight transport. And seaport is vie ed the most important freight transport node

in contrast to other nodes, li!e airports and train stations. Thus, large si-e vessel has turned

out a very useful and profitable mode in global imDe&port trade. Boffmann >'??8@ has ritten

about t o trends lead to concentration process in shipping industry1

"irst, the increasing of global trade as a proportion of orld ;=P made governments and

international organi-ations prefer to improving ports and shipping capacity and service

increasingly. This leads to larger optimum unit si-es of vessels, ports, and companies in port

industry.

Second, even though the fi&ed costs has increased as a result of construction of port facilities,

the change of technological has led to an decrease of variable costs as a proportion of total

average costs. And the transport costs is a biggest proportion of variable costs in any

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industries. Thus, this increases the incentives for shipping companies see!ing for the

ma&imi-e capacity vessel in order to reduce unit costs >i.e., to achieve economies of scale@.

After dramatically increased of vessel si-e in recent years, faster and larger vessels, and

improvements in cargo handling at ports are significant trends. 2arger operators ould use

their economic of scale to get mar!et po er. In the mean hile, larger vessels means fe er

port calls and more transshipment. This tendency directly leads to further concentration of

port traffic in fe er and larger ports. Bo ever, there are only certain ports can handle such

ultra large vessels. Thus, there is gro ing traffic concentration at certain ports.

$ormally, more and more small/si-ed shipping lines and port terminal operators face the

threat hich they lac!ed of the mar!et po er in favour of the shipping lines and the added

capability of dealing ith huge amount of cargo. Increasingly, many mid/si-ed ports are

playing a feeder role to the very large ports as hub and spo!e net or!s have emerged

>Boffmann,'??8@. The development of the smaller ports is mainly dependent on the route

strategies of the ma%or shipping lines to attract increasingly call of shippers.

2arger shipping companies can get more profit by economic of scale to get mar!et po er.

Bo ever, this factor has diminished as a result of competition from international shipping

companies. #ean hile, the emergence of global production systems, in hich ra materials,components, and final products are sourced, manufactured, distributed, and shipped globally,

has re9uired a profound restructuring of the transportation industry. Thus, the needing of

efficient logistics process to optimi-e transport chains, manage and integrate them ithin

seamless production, distribution and trading systems becomes the ne trends. Therefore, in

the ne&t section, I raise attention to the trends of logistics concept in maritime sector.

2.3 5e e,opments in ,ogistics concepts

"irst, the role of maritime logistics in maritime environment as defined. #aritime logistics

is concerned ith maritime transport >i.e. Shipping and ports@, traditional logistics functions

>e.g. Storage, arehousing, offering distribution centre services@ and integrated logistics

activities >e.g. alue/added services including labelling, assembly, repairing@ >$am, Song,

*+''@. #aritime logistics is often vie ed as a process of planning, implementing and

managing the movement of goods and information ith ocean carriage being involved. In this

ay, ports have a great chance to play an important role as the center of global logistics

activities. Ports become a hubs have to meet and provide the global standard in terms of

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hard are and soft are by investing for orld /class infrastructures and by e&perimenting

ith several policies >U$ES AP,*++5@. In this case, the role of ports mostly as the hubs

or! in the hole logistics process.

#any factors such as standardi-ation in production components, lo transportation cost and

the revolution of information and communication technology ma!e it possibale for global

companies to source ra materials and product components all over the orld and to bring

together and assemble ra materials, parts, and semi/finished products at a single or a fe

locations to reduce by a significant amount overall cost ithout any local interference to

product 9uality >U$ TA=,*++6@.

It can be concluded that efficient logistics process ould affect the performance of ports.

Thus, the function of those logistics process and liner shipping net or! highlights the role of

ports in maritime transportation. Bo does the changing of logistics affects the role of ports

ould be discussed in the ensuing paragraphs.

-ordism to Post/-ordism

has ritten about the impact of some structural changes in international trade in the sense

that logistics operation issue has to be changed in the frame or! of port management. The

most important change in economy is shift from "ordism to post/ "ordism. The "ordism

economy is based on the concept of F economies of scale F in production, hereas post/

"ordism is more directed to ards F economies of scope F and fle&ible organi-ations through

co/operation in economic net or!s. Post/ "ordism is more focus on consumers re9uirement,

hich associate ith product variet, the 9uality and the reliability of the consumer goods.

Together, the short product/life cycles and the short time/to/mar!et affect the logistic chains

leading to more adoptable multi/firm organi-ation structures for most production companies.

Table ' . "rom "ordism to post/"ordism

"ordism Post/ "ordism

Source of

competitiveness

Economies of scale based on

basic production factors

>capital, land, labour@

Economies of scope based on

advanced production factors

>!no /ho , procedures@

$ature of products Standard products 2arge product variety

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The outsourcing of transportation, arehousing and distribution. $ot only outsourcing of

transportation is already idespread, but also arehousing and distribution activities are

becoming fast gro ing outsourcing businesses. #any companies have ac!no ledged

that arehousing and distribution is not part of their core business and as a result theseoperations are outsourced to logistics service providers >$otteboom, 4in!elmans, *++3@.

(hree stages of the e o,ution of ,ogistics concept

To get a better understand about ho the evolution of logistics concept impact the role of

ports changing, =e 2angen and van der 2ugt classified ( stages that have evolved in Europe

first 1

Internationalisation products are delivered directly to different mar!ets in Europe. In thisstage, transport is decentralised, different countries in Europe ere different mar!ets.

The national distribution centres ere contributed into different consumer mar!ets.

The second stage is the concept of integration entral European =istribution hich a

single physical central distribution location here value added activities can ta!e place is

to get more efficient logistics. Such a single distribution center serves all European

mar!ets. In this case, the port here this certain single distribution centre as located

can be defined as a gate ay port.

Gateway port - Ports serve as a critical link between geographical areas or regions by

providing a system of road, rail and marineas transportation infrastructure of national

significance for international trade as a node in a globalized supply chain(Jose, 2 !"#

$trategic location, efficiency and reliability, connectivity and shipping fre%uency and

ade%uate infrastructure are the key determinants of gateway ports#

Strategic location1 situated on the main maritime routesG situated in or near

production andD or consumption centersG ith natural deep ater harbors, natural

brea! ater and big aterfront and landside development

possibilities>U$ TA=,'??*@. The t o top ran!ed ports, Bong 0ong and Singapore

as very good e&amples, have been chosen by ma%or container lines as interchange

points bet een main line and feeder services.

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Efficiency1 speed and reliability of port services. ompetitiveness as the ability to

get customers to choose a particular service over competing alternatives on a

sustainable basis >Schlie,'??6@.

Ade9uate Infrastructure1 include physical and soft elements. Physical infrastructure

includes not only the operational facilities, but also the inter/modal transport. The

soft infrastructure refers to the manpo er employed. 4orth to noted that information

technology is applied increasingly in logistics.

onnectivity1 fle&ibility net or!s around transshipment ports here different trade

routes intersect and interconnect have replaced traditional port/to/port routes. And

great fre9uency of ship calls allo s for greater fle&ibility and lo er transit time.

&ikewise, high performance distribution systems will be re%uired# 'hus, an ideal gateway

port should provide a diverse range of services that are highly integrated# 'he role of

gateway ports is definitely played when logistics is taken into account#

entral coordination logistics platform. This concept focus on the combination of

logistics efficiency and mar!et e&pansion hich as driven by customer re9uirements.

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"igure '. Evolution of import related logistics concepts

$ource )nternational Journal of &ogistics

In the ne&t section the development of ports are discussed. As ma%or gate ays for maritime

trade, many ports are ta!ing advantage of their strategic position in the logistics chain by

offering numerous additional value/added services >Alderton,'???@.

2.4 (rends in port sector

Ports and maritime transport have e&isted for some thousands of years and have developed inline ith the evolution of international trade hich has been inherent in shaping the modern

orld. Ports and maritime transport thus play an important role today in global commerce. It

is important to first define e&actly hat is meant by the term HportH.

5efinitions

Port is a geographical area here ships are brought alongside land to load and

discharge cargo/usually a sheltered deep ater area such as a bay of river mouth.

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>Stopford,'??7@

Traditionally, ports ith high volumes of local cargo can be a transshipment centre. Bo ever,

some small ports no local cargo at all. Thus, this led to ne trend that many big ports has

generated additional business by attracting the cargo from other small ports. The

concentration also happened in the port sector. As I discussed that concentration can lead to

lo er unit costs through scale economies. To be attractive as a transshipment centre, a port

need to have a local cargo base or at least to be located near another port hich has its o n

cargo base >Boffmann, '??8@.

Also, $otteboom >*++3@ noted that shipping lines try to attract cargo by differentiating from

competitors through calling in different ports. This change as merely to develop terminal

capacityG it can save relatively high transport costs over land. multiport@ to attract direct calls of

large vessels.

As I discussed above, globali-ation has created a real/time global mar!etplace and a business

focus and concentration on ma&imi-ing comparative advantage. #any factors such as

standardi-ation in production components, lo transportation cost and the revolution of

information and communication technology ma!e the concept of F;lobali-ationF more

possible. Ra materials, parts and semi/finished products can be brought together as a single

or a fe locations >U$ TA=,*++6@. Thus, many companies have generated e&isting logistics

places into a fe integrated logistics centers. In this case, ports have played an important roleas the center of global logistics activities. "or instance, Reebo! has selected the Port of

Rotterdam as its logistics center is a good e&ample. The logistics center concept ould be

discussed in the ne&t section.

The !ey factors for transshipment center ports are strategic location, high level of operational

efficiency, high port connectivity, ade9uate infrastructure, ade9uate info/structure and a ide

range of port services >Tong-on, *++'@.

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supply chain management and is significantly influenced by changes in supply chain

strategies.

"igure * . Emergence of distribution related logistics concepts related to managerial focus

$ource )nternational Journal of &ogistics

Therefore, the needing of reform and rethin! concerning the o nership and management of

the ports sector associated ith varing Supply hain #anagement #odel. *++7@ noted that many governments have moved to e&tract themselves from the

business of port operations and have concentrated on monitoring and oversight

responsibilities. '??5@ put for ard four models of port administration for the various

aspects of ports activities. Also, the classification of ports capture all relevant aspects of the

relation bet een the mar!et and the government >Stevens, '??7@.

:hang, iao >*+'+@ has discussed about different Supply hain models in the sense that port

logistics development model is a !ey issue related to the port function location and the core

competitiveness. Be concluded that the operating mechanism of the modern port needs to

advance ith the times to see! the o n logistics model according to local conditions. Each

model has its o n characteristics in the physical environment, hard are, management and

government support.

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4ith the development of ports, the core of port management concept has e&perienced a

process that is from the cost idea to the profit idea then to the integrated logistics service

concept >efficiency idea@ >:hang, iao*+'+@. Thus, he concluded that the needs of ports to

select a model suited to their development associated ith local conditions, the o n

conditions and characteristics of each model to ma!e matching.

2. Standards of ,ogistics performance

4ood et al.>'??5@ described three categories of standards of logistics performance in terms of

nations1 the first orld, the emerging economies, and the third orld. The $etherlands is stay

in the "irst orld, and hina is in the emerging economies level. Be had used some factors to

measure a nation s logistics performance hich includes infrastructure, performance,

information system and human resources, etc. Be noted that all of the logistics infrastructures

can be said to be highly evolved, certain differences remain due to historical development and

geography in the "irst orld. The detailed classification of logistics performance as

summari-ed by Simchi/2evi et at. >*+++@.

Table *1 The classification of 2ogistics Performance

"irst 4orld Emerging Third 4orld

Infrastructure Bighly developed Under/development Insufficient to

support advanced

logistics

Supplier operating

standards

Bigh ariable Typically not

considered

Information system

availability

;enerally available Support system not

generally available

$ot available

Buman resources Available Available ith some

searching

)ften difficult to find

2..6 onc,usion

The development of ports is very much lin!ed to the development of the economy. This

relation can be e&plained in t o ays. The first e&planation is because port is vie ed as amain economic driver ill gain enormous capital hich contributes into national economy.

2(


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hapter 3 Methodo,ogica, -rame1or

As the important logistics nodes, the level of the logistics service is the core competitiveness

of ports. In order to generate detailed information, the attributes of a orld/class logistics

system are used to compare t o ports logistics systems. Then, the compositive method of attributes is proposed to categories logistics systems in t o ports. According to 4ood et al.

>'??5@ and 2PI >logistics performance inde&@, the four general attributes, i.e. infrastructure,

performance of logistics services, border procedures and time, and supply chain reliability are

employed.

The purpose of case study is to conclude the performance of the logistics systems in t o

ports. Port of Shanghai and Rotterdam represent top port of Asia and Europe respectively.

Those t o countries are studied in detail to dra logistics lessons applicable else here.

Therefore, the focus is evaluating ho efficient the operation of logistics in t o ports. Thus,

in this section a methodological frame or! ill be outlined first.

3.+ 0nfrastructure

The !ey role of an integrated logistics system is to assist in the production, consumption and

distribution, hich means that goods must be produced and delivered to the mar!et in the

right 9uantity, re9uired 9uality, and at a competitive price> hristopher, #., '??8@. Thus, I

ould use 3 main factors to e&plain the importance of 9uality of infrastructures in port

logistics systems.

The infrastructure of ports are an essential component of modern port logistics systems.

There are t o ays of measuring port infrastructure 9uality1 physical indicators and

economic or financial indicators.

"irst, physical indicators generally refer to maritime infrastructure hich consists of portfacilities and maritime transportation net or!s.

#aritime transportation net or!s can be considered a pro&y of the port s accessibility to

global ports. And the maritime transportation connectivity can be measured by degree and

bet eeness of t o ports centrality in the 4orld ide #aritime Transportation $et or!

>4#$@. J. Bu and =. :hu>*++8@ has noted that a typical hub/and/spo!e structure consists of

interconnected hubs and other nodes hich allocated to a single hub. This structure allo s the

carriers to consolidate the cargo in larger vessels to lo er the transportation cost. Thus, the

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more connection the interconnected hubs>central nodes@ ith other nodes ould reduce

transportation cost.

#oreover, port facilities consists of hard are and soft are. Bard are infrastructure includes

land hich is referred logistics activities and e&it of cargoes. Soft are infrastructure refers to

port operating systems. "or instance, the port dues and cargo/handling charges. road, rail, etc.@. 2and/side efficiency is related into the

the e&pansion of port capacity by ne transport infrastructures >0halid and Richard, *++3@.

And hat is more, information platform and logistics technology ould promote rapid

development of logistics industry. Thus, I set the 9uality of I T infrastructure as an indicator

also. #ore stable and innovative I T system represent more advanced logistics system. Also,

I set more specific indicators hich comprises several third/level indicators in the table.

Additionally, the length and production of berth are used to measure the 9uality of port

infrastructure. #oreover, more capacity of arehouse ould provide more capacity for

cargos to stay.

3.2 Ser ices

"rom the port logistics services, e can see the current operation performance and

sustainable development of port logistics industry. So it is easy to !no the strength and

ea!ness of port logistics industry. The mainly indicators refer to domestic logistics costs

and the si-e of port logistics. 2o er logistics cost is al ays the ob%ective of logistics

services. As I discussed above, the maritime sector has lo transaction costs and large

economic of scale hich locate the most important status in transport sector. Thus, the 9uality

and efficiency of port logistics industry are mainly determined by domestic logistics costs

and the si-e of port logistics.

"or domestic logistics cost, the timely and costs delivery of shipments to destination are used

to indicate this factor. Shorter time and lo er costs means lo logistics costs and efficient

logistics performance. Also, other infrastructure charges of ports are used to compare the

domestic logistics costs of t o ports. "or the si-e of port logistics, the handling capacity of

port logistics refers to the 9uantity of goods hich load and unload in the port. That is the

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reason that ports e&pand the investment of port infrastructures to get more capacity of port

logistics. Thus, throughput hich is divided into cargo throughput and container throughput

is used to measure the si-e of port logistics services.

Port charges are caculated by the sum of various tariffs hich are based on ;RT, $RT,

length, draft and etc. In order to compare t o ports charges, harbour and light duesG

pilotageG to ageG mooringDunmooring and ancillary charges are used. Barbour and 2ight

=ues are using charges according to the tonnages of vessels. Pilotage charge is the service fee

hich is calculated by the si-e of a vessel andDor the distance. Ancillary charges consists of

portlclearance chareG port entry feeG maritime elfare chares and harbour cleaning and

maintenance fee, etc.

3.3 )peration process

)perational indicators are more direct concern to port management than financial indicators.

The important information to concern is the number of ship arrivals and a brea!do n of the

ships time in port for each class of cargo. ;enerally, it can be indicated by turn/round time

and degree of congestion. The turn/round of ships in ports direct concern to ship o ners and

operators, and then concern to shippers and consignees ho must pay the freight rate

>Plumlee,'?75@. $ormally, turn/round time is total time bet een arrival and departure for allships hich divided by number of ships. 4hat is more, the congestion level is also an

e&cellent indicator to maintain of port effectiveness. The congestion of ports means longer

aiting time ' for berthing spaces in the port. The figure must be higher hen congestion e&ist

than ports ithout congestion.

Any reduction in turn/round and aiting time ould therefore reduce the overall cost of the

delivered goods >Ty orth and :eng, '??8@. Thus, for a efficient port, 9uic! vessel turnaround

time and high berth production are very important factors. The longer a vessel stays at the berth, the more the port charegs for the vessel s stay.

According to the development of S #, the process of operation of port is a !ey prere9uisite

to improving the efficiency of port logistics.


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3.4 Supp,y chain re,ia&i,ity

Time and costs are not the only dimensions in hich reliability is also important. The

reliability of the supply chain is the most important indicator of logistics performance.

$ormally, the reliability is evaluated by the 9uality of logistics service hich is mainlymeasured by import and e&port time directly. $ot ithstanding, most customers mainly

consider hether cargos delivery ithin the promised time and hether errors e&it, the speed

and route are not the only factors that can affect importDe&port lead times >2PI,*+'+@. The

border process * has a big possibility to influence the hole logistics process. Thus, delay in

actual delivery hich can be caused by the unpredictability of the clearance process itself

may be more important than average importDe&port lead time in understanding logistics

performances. #ore over, clearance time and transparency of customs clearance are used tomeasure the efficiency of customs clearance process>2PI, *+'+@. Thus, delays in logistics

process, hich is caused by custom clearance services is the main indicator to measure the

reliability of the port management in S # instead of the average importDe&port lead time.

3. usiness en ironment

This attribute give a brief overvie of the opportunity to invest in the ports.


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hapter 4 ase Study

4.+ ) er ie1 of PoS

The Port of Shanghai is located in the vicinity of Shanghai hich comprises a deep/sea portand a river port. Port of Shanghai has been the largest and most important seaport in hina

since the end of the nineteenth century. The Port of Shanghai s contributions to the economy

of the nation came at a high price for the city. Shanghai is no establishing a presence as an

international shipping and financial centre. Also, Port of Shanghai has been sho ing its

interests in the logistics industry to improving national e&port competitiveness through a

sophisticated domestic logistics industry and attracting foreign companies.

"igure (1 The location of container terminals of Shanghai Port

$ource Port of $hanghai

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0nfrastructure

*istribution network

Port of Shanghai consists of three ma%or container port areas, namely 4usong!ou,

4aigao9iao and Jangshan deep ater Port in the port area. It operates a total of *?( thousand

s9uare meters of arehouses and over 3.7 million s9uare meters of storage yards. 4usong!ou

Port as the main port prior is used for domestic container vessels G and Jangshan =eep/ ater

Port as a man/made area ill increase to '8 s9uare !ilometers and the deep ater coastal line

ill reach ** !ilometers by *+*+. #ore than 5+ container berths, capable of handling the fifth

and the si&th generation of container ships >5,+++/6,+++ TEU@ ill be built. The annual

handling capacity of the deep ater port ill increase to around *5 million TEU.

Although the Jangshan Port could not compete ith Bong 0ongKs natural and deep/ ater

harbor, Bong 0ong lost its traditionally manufacturing centre position since the establishment

of the Shen-hen Special Economic :one in '?7?. Therefore, the opening of Jangsan

ontainer Terminal is e&pected to lead to a reduction in the number of direct calls by ma%or

services at other ports of mainland hina, contributing to the increased transshipment

opportunity at Shanghai ( .

The Port of Shanghai also o ns 5'3( units of cargo/handling e9uipment 3. The port connects

the east/ est traffic route, i.e., the Jangt-e River, and the north/south traffic route, i.e., the

sea coast 5. Shanghai port has '6 international shipping lines connecting ith 5++ foreign

ports in more than *++ countries.

+ater transportation

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ships can be loaded in port ith all/ eather. It ould raise the status of Shanghai hub to

speed up the building of an international shipping hub. The Jangshan deep/ ater port has

more than (+ terminals ith an annual handling capacity of '5 million TEUs and above.

oad

The high ay net or! hich consist of T o Avenue of PortG Bong!ong/Shanghai 2o Speed

>A*@G the )uter Ring of Shanghai >A*+@ and Suburban Ring >A(+@, ould ma!e the traffic

more po erful and efficient.

ail

The construction of a ''7!m Pudong rail ay is e&pected to help Shanghai develop into a

shipping and aviation hub in Asia. The rail ay lin!s suburbans such as inshan and Pudong.

The rail ay ill mainly transport cargoes fromDto Pudong International Airport, Jangshan

=eep 4ater Port district, 4aigao9iao "T:, and ao%ing hemical Industry Par!.

aintenance and development

As sho cased in Shanghai #unicipal ;overnments s '' th "ive/Jear Plan >*++6/*+'+@,

appro&imately '7 billion R#< >*.+6 billion US=@ credit invest for the port construction up to

the year *+*+ >port of shanghai@. The construction of 5 7 to '+ thousand/ton berths able to

accommodate the orld s most ne&t generation on Post/Panama& container shipsG 9uay

length ould be '6++ mG an area of '.5( s9uare !ilometers land area ith an annual handling

capacity of ( million TEUs or more.

The development of Shanghai e/port system is to improve the economic effectiveness and

social benefits of local international logistics informationi-ation hich based on the

electronic customs declaration and the electronic payment platform.

4.2 ) er ie1 of Port of Rotterdam

The Port of Rotterdam is the largest port in Europe, located in the city of Rotterdam, South

Bolland, the $etherlands. It became one of the first global ports, a tradition that still

dominates today as Rotterdam is the maritime gate ay to continental estern Europe. 4ith

the gro th of industrial activity in its hinterland, especially in the Ruhr >;ermany@ in the

$ineteenth entury, bul! transshipment facilities ere added in the '?*+s and follo ed by

petrochemical facilities in the '?(+s. The port became one of Europe s main oil

3)


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transshipment and processing facility hich contributed into the orld s largest

petrochemical comple&.

Port of Rotterdam has about 5++ connections to more than ',+++ ports orld ide. The port

no has more than *++ hectares of sites ready for distribution over numerous plots. In order

to use the available space to cope ith the gro ing throughput, storage and distribution of

containers for industry.as efficiently as possible,

Port of Rotterdam as European centre for transshipment, industry, distribution, trade and

transport, centrali-ation brings it many logistical and other advantages hich include

reduction of logistics costs, increased sales, improved control, better product availability,

enhanced competitive position, faster mar!et response, etc.

0nfrastructure

*istribution infrastructure

The Port of Rotterdam covers an area of over 5.( thousand hectares of infrastructure and

ater surface. The port is 3+ !ilometers long and contains 8? !ilometers of 9uays and '5++

!ilometers of pipelines. The Port of Rotterdam has over ?+ terminals speciali-ing in different

types of cargoes6

. The container terminals situated directly on the $orth Sea have a depth of up to '?.65 metres at the edge. The port ill be e&tended by #aasvla!te * ith *+L.

Rotterdam has three large/scale areas for distribution centers spread throughout its port1

=istripar! Eemhaven, =istripar!


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#aasvla!te *, in total the port area ill increase by *+L. #aasvla!te * ill cover *,+++

hectares, of hich ',ooo hectares ill be lettable sites.

"igure 31 2ocation of the distripar!s in the Port of Rotterdam

$ource Port of otterdam

)nland shipping

Rotterdam is located strategically at the mouth of the rivers Rhine and #aas to attract more

reliable and cost/effective containers bet een the port and a comple& net or! of inland

terminals in the $etherlands,


33/46

The seaport cluster of Rotterdam has already been affected fundamentally by technological

changes1 I T has led to everyone no using mobile phones and computers, and much

physical or! on ships and ports has been automated. Rapid technological development is

li!ely to continue during the coming years ith ne forms of I T implying pervasive

computing, radio/fre9uency indentification >R"I=@, nanotechnologies and other innovations.

Also, integrated E=I technology lin!s shippers and consumers effectively. R"I= technology

ma!es it possible to place small electronic tags on various goods, machines and other

products, and thereby trac!ing them.

aintenance and development

Rotterdam #ainport =evelopment Pro%ect >P#R@ ould strength the mainport and to

improve the 9uality of the living and or!ing environment by three pro%ects1 ',+++ hectare

e&tension of the port into the sea, and ill be *+ meters deep and able to accommodate larger

container ships than any other port in Europe 7G e&pansion of the e&isting port and industrial

area to facilitate more intensive use of the space and to improve the 9uality of the living and

or!ing environmentG the construction of 75+ hectares of ne recreational and natural areas

near Rotterdam. #ore specifical pro%ects are introduced belo 1

Binterland connection1 the


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aritime transportation networks accessibility

=egree of ports represents the number of directions passengers or cargoes can travel at a

given port hich high degree means more connected ith other nodes. Also, bet eenness of

ports is the proportion of the shortest paths > hich is the number of stops one has to pass to

travel bet een any t o ports@ bet een central nodes that pass through the given central nodes

to ards all the shortest paths. Thus, the higher the inde&, the easier it is to access a high

capacity and fre9uency global maritime freight transport system and thus effectively

participate to international trade.

According to the table above, port of Shanghai has less connection ith global mar!et than

Rotterdam, but it still has potential to develop. The construction of Jangsan deep/ ater port

had increased the capacity and opportunity to attract more cargos, the lin!ages ith other

ports by maritime connection ould not be a ea!ness of Shanghai any more.

Table 3 8 1 #easurements of t o ports centrality in 4#$

Port =egree of entrality


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Port charges

>M@ total

Barbour and

2ight =ues

Pilotage

charge

To age

charge

#ooringDun

mooring

harges

Ancillary

charges

PoS '73*3 3585 56(5 67(( 66 3+5

PoR 3(+5* *'685 8?3* 8'8' *''+ *'(*

Also, 2ogistics performance inde& survey about the cost to importDe&port a 3+/foot container

or a semi/trailer>M@ by t o ports. The average of cost are (?7.6(5 and 58(.'5 () of Shanghai

and Rotterdam separately. The cost of Rotterdam is almost the double of Shanghai. This

result matches ith the conclusion that the logistics cost of Rotterdam is higher thanShanghai s.

'he size of port logistics

The construction of Jangsan deep/ ay port pro%ect and #aasvla!e * pro%ect offers more

capacity of distribution of t o ports. Thus, the production of t o ports all increase, especially

the booming of cargo and container throughput of Shanghai. This figures indicate the needing

to enhance the construction of port infrastructure to meet the demand.

Table 61 omparison of production of t o ports ''

argo

throughput '*;ro th rate>L@

from *++8

ontainer

throughput '(

;ro th rate>L@

from *++8

PoS 65+.+ '+.5 (86,?57 '6.*

PoR 3*?.? *.+5 '','36 (.*5

() &ource+ ogistics %erformance Inde %I , 2)()

(( &ource+ %ort of &hanghai statistics, %ort of 'otterdam statistics"

(2 -nit+ :ross weight ; (,))) metric tons"(3 -nit+ .umber; (,)))


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Operation process

.learance time

Shanghai1 a ne clearance model Hpreliminary customs clearance, release after actual

chec!ing the goodsH (4 ould shorten the average time for customs clearance to * hrs 5( min,

hich is an 86L improvement over the traditional method. Also, paperless clearance reduced

the average customs clearance time to '5 hrs 5+ min for imports and 3(min for e&ports, a

reduction of 5.76 hours and 3.+8 hours respectively.

Rotterdam1 goods can be pre/cleared by electronic document transfer. entrali-ed clearance

procedure (5 means electronical customs clearance collects all entry information by central

customs computer, the data ould be inputed and sent bac! a response to the agent by codes.Additionally, single access point ould offer a safety and security controls, the importer only

needs to deal ith its customs administration.

Table 71 omparison of t o ports clearance time and services

The average learance

time>days@(6

Transparency of customs

clearance (7

PoS *.53 (5.*?L

PoR +.785 87.5+L

Reliability of Supply Chain

'urn-round time

Port efficiency is directly affected turnaround time for vessel in harf. Turnaround time is

measured in hours, much less than a day in the best ports in the orld. 2onger turnaround

time means long stay in the port as a result of lo operation speed or port congestion

problems. The turnaround time in Port of Shanghai is also longer than Rotterdam. The

(4 #odel mean e=manifests for customs declaration is accepted instead of the traditional practive of forestalling customs declaration until the arrival of goods" &ource+ shanghai customs government"

(5 &ource+ /uropa 0ustoms 0learance

(6 &ource+ ogistics %erformance Inde , 2)()(7 &ource+ ogistics %erformance Inde , 2)()

36


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potential reason are shortage of containers and customs arehousing reaching capacity hich

leads to congestion in the port. This ould be e&plained by the congestion level of t o ports.

Table 81 The container ship turnaround time in t o ports

PoS PoR

#easured by container ships

turnaround time of ports

*( hours and '3 minutes (8 3 hours and (7 minutes (9

.ongestion level

Also, the port congestion level of ports are measured by the delay of containers. "or instance12uo%in Terminal normally has */8 2) days delay in Port of Shanghai, and E#) only has +/* 2(

days in Port of Rotterdam.

Business Environment

)nvestment opportunity

Shanghai1 the foreign trade volume of Shanghai ould increase (*.8L, around M(68.?

billion. In this case, e&ports and imports gre *7.3L and (8.5L separately in *+'+. "oreigndirect investment >"=I@ into Shanghai also raised to '5.'L in the mean hile. "ree trade

-ones and bonded arehouse facilities available.

Rotterdam1 port is a hub of international goods flo and an industrial comple& of global

stature. It as the biggest seaport in Europe faces to European mar!et of more than 5++ million

consumers 22 . PoR is e&pecting the port to gro from 3(+ million tonnes to any here

bet een 375 and 75+ million tonnes by *+(+. #oreover, larger funds by %oint investment

outside the $etherlands improved the general si-e of port infrastructure investments

(8 &ource+ 1 &trategic #odel of 0ompetition among 0ontainer %ort in .ortheast 1sia, ong=1n %ar$,2))9

(9 &ource+ %ort statistics of 'otterdam

2) &ource+ :lobal %orts 0ongestion Inde , 2)()

2( &ource+ :lobal %orts 0ongestion Inde !earboo$, 2)()22 &ource+ :lobal=1rena

37


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opportunity, appro&imately *5/(5 billion RUR investment in *+(+ 23 .


39/46

hapter onc,usions and Remar s

In last chapter, the status and improvements are briefly e&plored, focusing on the

performance of t o ports logistics systems. Port of Rotterdam as the orld/class port fit for

the re9uirement of H"irst 4orldH 2ogistics system hich is described by 4ood et al. >'??5@.

The infrastructure is highly developed, the standards of operating system is high, information

system al ays has innovation. 4hile, Port of Shanghai is still stay an emerging level, even

through its container throughput has overta!en Singapore to be $o.' in *++?.

The conclusions can be divided into three categories as follo s1 >l@ Port infrastructure

construction. >*@ Efficiency of port development strategy and operation process. >(@ Port

management system.

"irst, there is no doubt that Shanghai is emerging the busiest container port in the orld. Its

infrastructure, even related/transport infrastructure, has overta!en Port of Rotterdam s in

9uantity level, hile the 9uality of infrastructure in Shanghai only around the middle level to

compare the rest of ports in the orld. The score %ust around the mean, even less it.

$ot ithstanding, the production of Port of Shanghai hich measured by cargo throughput

and container throughput stays the primary level around orld, it mostly benefited from

hina economy s gro th and geographic advantages of port. Thus, the capacity of Shanghaihad improved, hile ShanghaiFs container/handling facilities services basically remain

bac! ard. Thus, it can be concluded that the construction of infrastructure in Shanghai still

failed to meet the fast gro ing demand.

Second, the one of physical obstacles is that insufficient strategies involved in port

development. And it has ris! of under/investment and lac! of innovation. The laggard

condition of distribution and infrastructure net or! has no become one of the restricting

factors for development of port logistics in Shanghai. #oreover, lac! of high efficient

logistics information form is a significant ea!ness of the development of Shanghai port

logistics. "urthermore, the cooperation bet een related departments is not smooth.

Third, shanghai still shorts of modern logistics hich provide 9uic!, reliable, fle&ible and

comprehensive services after the large investment of port infrastrucre. Port logistics lac!s of

overall/control and long/term co/operation, and source asting by largely constructions in

the port area. It ould be e&plained by the rest of attributes. The cost of domestic logistics of

Shanghai has comparative advantages than Rotterdam. It ould attracts more and more

39


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foreign trade in the port even in hina. 4hile, the attributes Hoperation processH means the

efficiency of the clearance process hich as turned out a determinant indicator of efficiency

of logistics system of port. The days of clearance time in Shanghai is around t ice even third

times of Rotterdam. Additionally, the score of its transparency of customs clearance %ust less

than half of Rotterdam s. Thus, the score of indicators hich can effect the logistics

efficiency less than Rotterdam, hile the indicators lead to the delay is far more than

Rotterdam s. "urthermore, inade9uate technological capabilities of Shanghai are hard to carry

out a ide range of supply chain management activities. Thus, the reliability of Supply hain

of Shanghai still has to be improved.

To conclude, the improvement of port infrastructure and logistics system is al ays the core of

the development of Shanghai. 4hile, the 9uality of logistics system is more important thanthe production of ports. Port of Shanghai should strengthen its advantages and optimi-e

logistics operation system by learning from orld/class ports.

Remar s

This paper has e&amined hub port of Shanghai and Rotterdam by revie ing the e&isting

literature in terms of port spatial evolution. =uring this thesis, I had encounter some

difficulties and limitations. "irst, this paper has been ritten in my best approach. Bo ever,due to time constraints I am not able to collect specific datas that ere needed for a detailed

analysis. Second, 2ogistics Performance Inde& and ;lobal ompetitiveness Inde& are analyst

in terms of nations not a certain port. Thus, the data from 2PI and ; I is the closest data

hich I can find in such attributes. In the last but not least, there is missing data of the

aiting time of ports hich can indicate the delay in the port more specifically. Therefore, I

have to use specific e&amples by t o container terminals not the hole port.

4)


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Reference

Anderson, E.;. r and #orrice, =. . >*+++@, NA simulation game for teaching services/oriented supply chain management1 does information sharing help managers ith service

capacity decisionsCO, Production and )perations #anagement, ol. ? $o. ', pp. 3+/55.

Alderton. P. #. >'JJS@ Sru 'ransport /peration and 0conomics# Thomas Reed

Publications, East #olesey, Surrey.

hristopher, #., '??8, 2ogistics and Supply hain #anagement1 Strategies for Reducing

ost and Improving Service >Barlo 1 Prentice Ball@.

.B.Plumlee, Port Performance Inde&, "ifth Interim Report >Port Bueneme@, Public 4or!s

onsultants, '?75.

=e *++3@ 2angen, P.4. de, houly, A., *++3. Binterland access regimes in seaports.

European ournal of Transport and Infrastructure Research 3>*@, (6'/(8+.

*@, *3* *5?.

$otteboom, T.E. and 4in!elmans, 4. >*++3@ Structural changes in logistics1 ho ill port

authorities face the challengeC, aritime Policy and anagement, *8>'@, pp. 7'/8?.

Panayides, Ph.#., *++6. ontainer ports and global supply chains, In1 Paper presented at the=epartment of Economics Seminar, $ational University of Singapore, '5 une *++6.

4(


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43/46

$ource 1 .'3* port marketing and the challenge of the third generation port, 4552

Appendi / omparison of Port Logistics 5e e,opment Mode,s

#odel "eatures Respective

ports

Rotterdam port

model

2andlord type, unified planning by

government and ma!es their o n decistions

by business.

Rotterdam port

Ant erp port

model

o/funding type, Hone/stop, door to door,

frame to frameH comprehensive service, and

perfect transportation net or!.

Ant erp port

Singapore portmodel

oint type, direct investment bygovernment, a free port policy, intensive

Singapore port

43


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management, and service diversification.

Bong !ong model Independent type, self/organi-ing logistics

center, one/stop and integrated service,

sttention to personnel training.

Bong !ong

port

International

shipping center

model

ontainer hub port, dense routes, deep

channel a complete net or! of collecting

and distributing, and perfect service

functions.

Shanghai port

#odel of port

regional logistics

system

Port area is the center.


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45


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Appendi / (he $ast/9est Shipping Line

ma-thesismandy xu final

Documents