the maritime economist - spring 2015

THEMARITIME EconomistConnecting Academia and Professionals

Spring 2015 | Issue1

I N T E R N AT I O N A L A S S O C I AT I O N O F M A R I T I M E E C O N O M I S T S

Find Us at www.mar-economists.org

Greening and performance relativityVenus Lun

Maritime country profilesJan Hoffmann

FreshMINDSThe Ukrainian crisis: impact on the regional system

Kateryna Grushevska & Theo Notteboom

Emerging maritime technologiesBekir Sahin

INPLAINEditorial: Maritime empathy

How can we integrate academic and business excellence?

CHALLENGEPeer Review as an essential part of scientific publishingOkan Duru

IAME 2015Kuala Lumpur

Profession & PracticeRecent strategic developments for shipping companiesPeter Lorange

Has the shipping industry become a victim of its own success?Suresh Bhardwaj

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CONTENTSSpring 2015 | Issue1

President’s Message Jan Hoffmann, President of IAME 4Editorial: Maritime Empathy Okan Duru, Editor-in-chief 6Editorial Board & Owner Declaration

InPlainGreening and performance relativity Venus Lun 8Maritime country profiles Jan Hoffmann 14

Profession & PracticeRecent strategic developments for shipping companies Peter Lorange 24Has the shipping industry become victim of its own success? Suresh Bhardwaj 30

FreshMINDSThe Ukrainian crisis: impact on the regionalport system Kateryna Grushevska & Theo Notteboom 34Emerging maritime technologies Bekir Sahin 40

ChallengePeer Review as an essential part of scientific publishing Okan Duru 44

MemoriesPast IAME Conferences2012 Taipei, Taiwan Paul Tae-Woo Lee & Zaili Yang 482007 Athens, Greece Ilias Visvikis 54

Book ReviewCreating Global Opportunities: Maersk Line in Containerisation 1973–2013 by Chris Jephson and Henning Morgen Michele Acciaro (Reviewer) 58

Shipping industry unites for OSCAR 59

Annual Conference: IAME 2015, Kuala Lumpur, Malaysia 61

Editorial Board 2015–2016 64

Submission Quidelines

Cover Design & Photo: Okan Duru, Mariikka Servanto, Jan Hoffmann 69

In spite of smartphones, internet and 3-D printers, most goods we use and consume will always be physically moved one way or another - and ocean-going ships transport about 80% of the volume of global merchandize trade. Ports connect countries and their peoples by being the nodes where ships call to load and unload their cargo. Oil, coal, iron-ore and other raw materials as well as intermediate and consumer goods are one country’s exports and another country’s imports. The ships that transport these goods have grown in size over the last decades, and seaports have become increasingly mechanized, making use of the most specialized handling equipment. In total, seaborne trade amounts to 10 billion tons per year.

IAME is an international forum for the exchange of research and information among those interested in maritime and maritime-related issues. Membership is drawn from all continents and representation includes academics, industry and government. Members have the opportunity to interact with international colleagues by attending the annual IAME conferences, the next ones to take place in Malaysia (Kuala Lumpur) in August 2015, and in Germany (Hamburg) in 2016.

The Maritime Economist Magazine (ME Mag) is a project of the International Association of Maritime Economists (IAME), and as IAME’s current president, it is a tremendous honour and pleasure to welcome our readers to the first issue of publication.

We are confident that ME Mag fills an important niche by helping IAME’s members to share the findings of our research with those who actually matter when it comes to making use of these findings, i.e. the business community and policy makers.

The editorial team, led by Okan Duru, has made tremendous efforts to put together an outstanding first issue, benefitting from the dedication of our section editors and associates, reviewers, and our PR, Media, Art & Design Directors - all of them committing their time and resources to this project. Special thanks of course also go the authors, without whom we could not have assembled such an interesting first issue. I also wish to thank our sponsors, who have put their trust - and money - into this IAME project.

With ME Mag now formally launched, IAME has reached another milestone in our 25 year history. We hope you enjoy the reading.

President’s Message

Jan Hoffmann, [email protected]

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Scholars and business professionals as well as policy makers have at times different motivations and different working environments. The compensation and promotion mechanisms work differently. Professionals need rapid solutions in the dynamic business environment, and performance evaluation is often based on short-term results. On the other hand, scholars tend to a long time to take a step further in an emerging topic. There is an explicit time-lag between necessities of professional and academic setting. Scholarly knowledge does not always improve the present state of intellectual knowledge and products in the maritime industry. Some may shed light on an issue far from today’s concern. Public interest, social responsibility and development are some priorities of policy makers which may collide with interests of corporates.

There are also some differences on representation of knowledge, motivational factors etc. However, all have their own unique environment and excellence. The Maritime Economist (ME Mag) may help to merge these unique perspectives.

I usually refer to the ‘ciliary muscle’ metaphor for illustrating the zoom in-zoom out skill. Ciliary muscle is located on our eyes, and it manages our eye lenses for different horizons. Our visual system is capable of recognizing different horizons without changing lenses with these muscles. Eye itself is capable of focusing on a single point as well as looking to a big picture. The emergence of ME Mag lies on the rationale behind our visual system: Eliminating ignorance, having a holistic perspective, survive in different conditions and keeping resilient under the dynamic environment. An integration of academic and professional perspectives and building a strong empathy between both sides may create powerful and durable solutions to problems in the shipping business. There are many examples of well per-forming integration of scholarly institutions and shipping firms. ME Mag may develop new ways of integrations while increasing awareness of the industry.

Current Debates as Start-up MotivesIt has been more than seven years after the last global crisis with a historical peak and then a historical collapse of shipping markets. There are several lessons learnt with this disappointing experience. There are several reasons and several interpretations behind it. However, it is clear that we need to spend much more time on finding behavioral and institutional drivers.

Editorial

Okan Duru, [email protected]

Maritime Empathy: MEHow can we integrate academic and business excellence?


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“ While researchers focus on the “impact factor” that measures the frequency with which they are being quoted in academic journals, they may forget that they may have a larger real impact if their research findings were actually read, understood and used by industry and policy makers.

Marine technology offers new solutions at a fantastic speed. Mankind spent a century to shift between sail ships and steam ships or wooden ships and steel hull. However, shipping innovations in the last century are great! Speed of business and technology turned to be a critical challenge for corporate governance. Today’s executives need to be rapid decision makers with dynamic personalities.

Above mentioned circumstances are some examples of what will define the future of the maritime industry and why we will need scholarly knowledge much more than the last few centuries. The initial motives of ME Mag have emerged in this multifaceted and complicated environment. ME Mag aims at improving the link between people while promoting pluralism and collaboration.

Finally, I would like to acknowledge my colleagues at the Editorial Board of ME Mag (all are volunteers!) for their efforts to create the first issue. We are also thankful to our Art & Design Director as well as PR & Media Directors.ME Mag is a promising output of the team. researchers focus on the “impact factor” that measures the frequency with which they are being quoted in academic journals,

President of IAME Jan Hoffmann

Editor-in-Chief Okan Duru Associate Editor Adolf K.Y. Ng

INPLAIN Venus Lun (SE) Adolf K.Y. Ng (SAE) Lorena García Alonso (SAE) Joan P. Mileski (SAE)

Profession & Practice Pierre Cariou (SE) Thomas Vitsounis (SAE) Adrian Beharry (SAE) Assunta Di Vaio (SAE) Larissa M. van der Lugt (SAE) FreshMINDS Alessio Tei (SE) Emrah Bulut (SAE) Vicky Kaselimi (SAE)

CHALLENGE Jasmine Siu Lee Lam (SE) Okan Duru (SAE) Rosa Guadalupe Gonzalez Ramirez (SAE)


EDITORIAL BOARD

MEMAGConnecting Academia and Professionals

Memories Paul Tae Woo Lee (SE) Zaili Yang (SAE)

SOCIETY NEWS Michele Acciaro (IAME Newsletter Editor) Verena Flitsch (IAME Newsletter Co-Editor) Indika Sigera (SAE)

BOOK REVIEWS Michele Acciaro (SE) Indika Sigera (SAE)

PR & MEDIA DIRECTOR Vicky Kaselimi

ART & DESIGN DIRECTORMariikka Servanto

SE: Section Editor, SAE: Section Associate Editor

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President Jan Hoffmann Vice President Pierre CariouSecretary Thanos Pallis Emeritus President Theo Notteboom

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Greening and performance relativityDr Venus Lun, Director of Shipping Research Centre, The Hong Kong Polytechnic University

INPLAIN

Preamble

As one of the world’s most internationalized industries, shipping deals with the transportation of goods to facilitate global trade activities. Operators in the shipping community can broadly be classified into three categories: (1) first-party users that physically own the cargoes for shipment, e.g., traders; (2) second- party users that own facilities or vehicles to provide shipping services, e.g., carriers; and (3) third-party users that provide freight forwarding and logistics services. Shipping activities contribute to specialization and mass production. The importance of shipping has increased in the past centuries as we have witnessed the trends of industrialization, globalization, offshore operations and adoption of outsourcing strategies. With the significant growth in global trade volume, the shipping community has pay more attention to operate their shipping activities in an environmentally friendly manner. Implementing green shipping practice (GSP) to balance environmental performance with improved financial performance are important management issues facing many shipping firms. Various institutional pressures and the balance between environmental protection and firm performance are the challenging issues facing many shipping firms.

Shipping activities involve physical movement of goods. Although shipping operations are beneficial to global economic development through trade

facilitation, the shipping related activities cause such environmental harm as CO2 emissions and waste discharge. Public concerns about the environmental shipping operations are on the rise. It is essential for shipping firm to balance between environmental protection and business operations. In this connection, we propose the concept of Greening and Performance Relativity (GPR) and use an input- output approach to investigate the relationship between greening operations and firm performance in shipping operations. In addition, we examine the positive association between environmental and financial performance outcomes, and empirically validate them with survey data collected from shipping firms in Hong Kong.

Conceptual izat ion

The organizational capability to perform green operations has evolved as a competitive priority in the shipping community. The capability to perform business activities in an environmentally friendly manner in the shipping industry refers to as “greening capability”. Greening capability is concerned with implementing environmentally sustainable businessroutines to perform shipping operations. To develop the GPR, we first examine the greening capability of shipping firms. Firm capability can be defined as a colection of business routines for producing significant outputs. In general,

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organizational capability in performing business operations consists of two key elements: (1) it is embedded in business routines, and (2) it involves the transformation of factor inputs to outputs inside the black box of the firm.

Figure 1: Greening Capability

Organizational capability is a collection of routines undertaken by firms for producing significant outputs. This study examines greening capability with a focus on assessing the ability of shipping firms to simultaneously mitigate environmental harm and enhance financial performance. We use an input/ output approach, i.e., data envelopment analysis (DEA), as a tool to calculate the efficiency score of each firm for benchmarking purposes. DEA is a nonparametric Operations Research method for measuring the productive efficiency of firms. In examining the greening capability, the inputs are green shipping routines while the output is firm performance (in terms of environmental performance and financial performance). In the context of shipping operations, green shipping routines comprises six routines, namely Company Policy and Procedure (CPP), Shipping Documentation (SD), Shipping Equipment (SE), Shipper Cooperation (SC), Shipping Materials (SM), and Shipping Design for Compliance (SDC).

scholarly knowledge in plain language

Dimension ItemCompany policy (1) senior management supportand procedure (CPP) (2) mid-level management support (3) cross departmental support (4) company policies in support of environmental protection (5) management systems in support of green shipping practices (6) corporate environmental report in support of green shipping practiceShipping (1) handle shipping instructions electronicallydocumentation (SD) (2) handle invoices electronically (3) handle payment notifications electronically (4) handle bill of ladings electronically (5) provide guidelines to handle shipping documents environmentallyShipping equipment (1) eco-design for shipping packaging(SE) (2) eco-design for shipping cartons (3) eco-design for shipping pallets (4) eco-design for cargo containers (5) cooperate with equipment suppliers to enhance environmental performance (6) improve the design of shipping equipment to meet environmental standardsShipper cooperation (1) shippers are involved in eco-design for cargo handling(SC) (2) shippers are involved in enhancing environmental performance (3) shippers are involved in green deliveryShipping materials (1) reduction in packaging materials(SM) (2) improvement in design of packaging materials (3) improvement in packagingShipping design and (1) compliance with energy savingcompliance (SDC) (2) compliance with equipment reuse (3) compliance with recycling of waste (4) compliance with recovery of waste (5) compliance with reducing environmental negative impacts

Table 1: Input factor of greening capabilityItems to measure greening cabability.

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INPLAIN

GPR Score

We use the input/output approach to formulate an equation to calculate the GPR score. The GPR score is used to investigate greening capability and performance outcomes. The GPR score of a firm is determined by its efficiency in transforming input (i.e., green shipping routines) into outputs (i.e., environmental and financial performance). By assessing the ratios of inputs to outputs, the greening capability can be evaluated. Depending on the values of the input and output variables, the value of the GPR score can be1.0, greater than 1.0, or less than 1.0. A GPR score of 1.0 suggests that the effort spent by the firm to perform green shipping routines is proportional to its outputs (i.e., environmental and financial performance). If the value of its input is higher than the value of its output, the GPR score will be greater than1.0. If the value of its input is less than the value of its output, the GPR score of the firm is less than 1.0. A GPR score below 1.0 suggests that the effort spent by the shipping firms to perform the green shipping practices is lower than its output.

Figure 2: GPR score

green shipping routines) to outputs (i.e., the values of firm performance). Shipping firms achieving a high GPR score indicates that they possess the ability to perform GSPs competently. However, an excessively high GPR score may imply that the deployment of resources is inefficient with too much resource allocated to performing some business processes or business routines. On the other hand, a low GPR score indicates that the degree of participation in green shipping operations is inadequate. Shipping firms with low GPR scores may need to put more effort or allocate more resources to implement green operations.

Data Analysis

To examine the relationships between greening operations and firm performance, we employed the 107 usable returned questionnaires in a survey administered to a sample of 500 shipping firms drawn from a population of 1266 of shipping firms listed in the Hong Kong Shipping Gazette. These respondents were requested to report the level of their implementation of GSPs on the six dimensions of GSPs (i.e., CPP, SD, SE, SC, SM, and SDC) and their firm performance (in terms of financial and environmental outcomes) using the five-point scale. After the collection of data, we validated a list of 30 measurement items on the six dimensions of GSPs. The measurement items used for evaluating these six dimensions are summarized in Table 1. The scales for measuring the variables, the validity and reliability issues, the survey administration procedures, and the non-response and common method bias have also been examined. With the use of survey date collected from shipping firms in Hong Kong, the link between environmental and financial performance is empirically validated and application of the GPR

The GRP concept provides a useful tool for shipping firms to evaluate their greening capability by assessing the ratios of inputs (i.e., the values of implementing

“ Various institutional pressures and the balance between environmental protection and firm performance are the challenging issues facing many shipping firms.

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concept is illustrated. The analysis results show that the business routines of CPP, SD, SM, and SDC possess reasonably good capability in operations (with the average GPR scores higher than 1.0) while the business routines of SE and SC are relatively weak (with the average GPR scores lower than 1.0)

Figure 3: Results

Regression models are also developed to formulate an equation (i.e., pf = 1.702 +0.45pe where pf is the financial performance and pe is the environment performance) to examine the relationship between environmental performance and financial performance. By using regression equation, the positive association between greening and firm performance in shipping operations is confirmed.

Connotation

With the use of survey date collected from shipping firms in Hong Kong, the link between environmental and financial performance is empirically validated and application of the GPR concept is illustrated. The analysis results show that the business routines of CPP, SD, SM, and SDC possess reasonably good capability in operations (with the average GPR scores higher than 1.0) while the business routines of SE and SC are relatively weak (with the average GPR scores lower than 1.0). Shipping firms may need to deploy more resources to implement eco-design for shipping packaging and cooperate with business partners in greening delivery.

Figure 4: Connotation of the GPR score

The concept of GPR can serve as a benchmark for the relationship between greening operations and firm performance, as well as the indication of the degree of greening operations or areas for improvement. Our regression equation indicate that environmental performance and financial performance are positive associated. Direct impacts on performing shipping activities environmentally friendly include use less energy and reduce wastage to lower operating costs. Indirect impacts of adoption of GSP include attract more customers and enhance company image. The analysis results can motivate shipping firms to critically examine the greening operations and to deploy resources to enhance their greening capability as green shipping practices are beneficial to financial performance.

Figure 5: Connotation of the regression equation

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INPLAIN

Concluding remark

The GPR score is an excellent tool to examine the relativity between GSPs and firm performance. The empirical data collected from the shipping industry are useful to illustrate the application of the GRP score. The results may motivate firms in the shipping industry to critically examine their greening operations. Furthermore, the results of this study confirm that there is an association between environmental and financial performance outcomes. The establishment of the link between financial and environmental performance outcomes provides a strong support for shipping firms to deploy resources to enhance their greening capability as we have shown that greening operations are beneficial to profitability.

Source: Lun Y.H.V., Lai K.H. Wong W.Y.C. and Cheng T.C.E. (2015), ‘Greening and performance relativity: An application in the shipping industry’, Computers and Operations Research, 54: 295-301

Dr Venus Lun, Director of Shipping Research Centre, The Hong Kong Polytechnic University

Dr Venus Lun is Associated Head and Assistant Professor of the Department of Logistics and Maritime Studies at The Hong Kong Polytechnic University (PolyU). She is also Director of Shipping Research Centre of PolyU. She holds the visiting positions of Erasmus Mundus Scholar, City University London (UK); Visiting Fellow, Curtin University (Australia); Visiting Scientist, Nanyang Technological University (Singapore); and Visiting Scholar, Chung-Ang University (Korea). She is currently Editor-in-Chief of International Journal of Shipping and Transport Logistics. She is also Guest Editor of the following scholarly journals: Accident Analysis & Presentation, International Journal of Production Economics, Research in Transportation Economics, Transportation Research: Part D, and Transportation Research: Part E.

“ The capability to perform business activities in an environmentally friendly manner in the shipping in-dustry refers to as “greening capability”.

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Maritime country profiles Which countries specialize in which maritime businesses?

Dr. Jan Hoffmann, Chief, Trade Facilitation Section, UNCTAD

INPLAIN

Throughout most of history, “maritime nations” had their own national fleets, which were built, owned, and manned by nationals of the same country whose flag the ship flew. Today, a typical cargo carrying ship may well be built in Korea, owned by a German investment fund, operated by a Danish container shipping line and fly the flag or the Marshall Islands. The crew may be Philippine who are on contract through a crewing agency in Cyprus. The ship may be “classed” by a technical certification society from Norway and be insured in London. Once the ship becomes too expensive to maintain, it will most likely be recycled in Bangladesh, India or Pakistan. Different countries participate in different maritime businesses,

and policy makers have an interest to identify those maritime businesses where their countries participate at present, or might participate in future.

Market shares

Let us start out by looking at the market shares of 8 selected countries in some key maritime businesses1. The following charts show each country’s share in the world’s population, economic output (i.e. their Gross Domestic Product, GDP), and merchandise trade, as well as 6 maritime businesses2: 1. Ship owning 2. Ship registration, i.e. the flag the ship is flying

1 The 8 countries are chosen as examples for being representative of a range of different maritime profiles, each specializing in a different set of sectors. The author would be happy to share more examples and data by email ([email protected]). 2 Sources: GDP, population and trade: UNCTAD statistics. Ship owning, registration, building and scrapping: Clarkson Research Services. Container port traffic: UNCTAD on the basis of port websites and specialized sources. Officers and ratings: ISF/BIMCO 2010 manpower update. Data is for January 2014, or the latest available year. The units and years are: For ship owning and registration dead weight tons as at 1 January 2014. For ship building and scrapping gross tons during 2013. For port container traffic twenty foot equivalent units during 2013. For officers and ratings workers in 2010.

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3. Ship building4. Container port traffic5. Seafarers, including “officers” and “ratings” (i.e. seafarers that are not officers). 6. Ship scrapping What can we see from the market shares of, for example, Chile (Figure 1)? Chile has a higher share of the world’s GDP than of the world’s population, which shows that Chileans have an above-average annual income. The country’s share in merchandise trade is even higher, reflecting the fact that Chile has an open economy, whose economy depends more on foreign trade than the average country. And Chile’s trade is mostly seaborne, resulting in a share in containerized port traffic that is even higher than its share in merchandize trade. The seaborne trade of Chile is mostly carried on ships that are not owned by Chilean companies, as can be seen by the lower share in ship ownership. The Chilean-owned tonnage is mostly registered abroad, i.e. it is using a foreign flag, as can be seen by the even lower market share in “National Flag Fleet”. Chile has some minor ship building activity, i.e. the ships it owns and the ships that carry its foreign trade are mostly from foreign ship yards. The highest market share of Chile is for its seafarers, including officers and ratings, many of which are employed on ships that are neither owned nor


registered in Chile. The share in the export of labor from the officers is slightly higher than the share in ratings. Finally, there is no ship recycling recorded in Chile.

Other countries have very different maritime profiles. Germany (Figure 2) is one of the world’s largest trading nations, but not all of its foreign trade is handled by its container ports, but rather by land transport with its neighboring countries, and through seaports in the Netherlands and Belgium; Germany’s largest market share is in ship owning. Greece (Figure 3) also has its highest share in Ship Owning, followed by the National Flag Fleet. India (Figure 4) purchases ships for scrapping; many Indians also work as officers on foreign owned and flagged ships. Republic of Korea (Figure 5) specializes above all in Ship Building and Ship Owning. Malaysia (Figure 6) provides a lot of transshipment services to international container shipping lines, and many Malaysians work as seafarers abroad foreign owned and foreign flagged ships. Panama (Figure 7) is mostly known for its open registry; compared to its population and GDP, Panama also has high market shares in port traffic and the provision of officers and ratings. Singapore (Figure 8) has particularly high market shares in ship ownership, registration and container port traffic.

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INPLAIN

Figure 1: Maritime Country Profile of Chile

Figure 2: Maritime Country Profile of Germany

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* Note: units are market shares, i.e. % of world total for 2014 or latest year for which data is available.

Figure 3: Maritime Country Profile of Greece



Figure 4: Maritime Country Profile of India

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INPLAIN

Figure 5: Maritime Country Profile of the Republic of Korea

Figure 6: Maritime Country Profile of Malaysia

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Figure 7: Maritime Country Profile of Panama



Figure 8: Maritime Country Profile of Singapore

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INPLAIN

Ship owning countries are the richest

The world average income per capita in 2013 was 10 416 US$. The countries that are active in different maritime businesses are on average richer, i.e. have a higher GDP per capita. The exception is ship scrapping, which takes place mostly in Bangladesh, India and Pakistan; the weighted average GDP per capita in the ship scrapping countries is just 2 996 US$. The richest countries are those with ship owning interests (weighted average GDP per capita of 32 671 US$), followed by those with high container port traffic (23 080 US$) and ship building (20 694 US$).

Figure 9: Weighted average GDP per capita in countries in different maritime businesses

Concentration and special izat ion

As countries specialize in different maritime businesses, the other side of the same coin is a process of concentration. The most concentrated sectors are ship building, where the top 3 countries (China, Japan and Republic of Korea) together account for almost 93 per cent of global production, and ship scrapping, where the top 3 countries have a combined market share of 77 per cent and the top 4 countries even 96 per cent (Bangladesh, China, India, and Pakistan). In ship owning (China, Greece, and Japan), registration (Liberia, Marshall Islands, and Panama) and port traffic (China, Singapore, United States) about two fifth of the world total are provided by just three countries.

Many other maritime sectors, too, are concentrated in a few countries. A small number of container terminal operators from Hong Kong, Dubai, Singapore and Amsterdam have about half of the container terminal concessions (by traffic). Many Protection and Indemnity (P&I) Clubs are in the United Kingdom or Scandinavian countries. Most technical assessments are undertaken by the 12 members of the International Association of Classification Societies (IACS).

Clustering of marit ime sectors

Some maritime sectors are more likely to be found in the same country than others. The below “Dendrogramme” (Figure 10) illustrates the statistical correlation between the per capita market shares of different maritime sectors, i.e. the likelihood that a country will have similar market shares in the two sectors. Countries that provide many officers as seafarers are also likely to provide ratings. Countries with a high GDP per capita are also likely to be larger importers and exporters. The same countries are also more likely to record high volumes of containerized port traffic. Most maritime sectors, however, are more likely to be found in different countries. For ship scrapping, the “similarity” is even negative, i.e. most ship scrapping takes place in countries that have only small market shares in other maritime businesses.

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Figure 10: Clustering of Maritime Sectors

In past centuries, a maritime nation would benefit from synergies between the different maritime busi-nesses. Ship owners would fly their own country’s national flag and employ their own compatriots – all speaking the same language and being geographically close. They would find it easy to operate their ships,

calling in their home seaports and having ships built and repaired in national ship yards. An experienced captain could find employment in maritime and port administrations or in classification societies that supervise ship building. Steel from a recycled ship could be reused for new constructions.

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INPLAIN

Policy makers’ choices and trade-offs

Over the last decades, trade has grown faster than the economy as a whole, and shipping will continue to be the most important mode of transport with the lowest environmental impact. The long term perspectives for seaborne trade and the maritime businesses are good. Policy makers are well advised to identify and invest in maritime sectors where their countries may have a comparative advantage. And sometimes choices will have to be made. The following three examples illustrate such choices and possible trade-offs.

Example #1: Would policy makers favor the national ship owners or rather the national seafarers? For a national ship owner to remain competitive, he may want to employ less costly foreign seafarer. To be allowed to do so, he may need to register his ship under a foreign flag. Without the emergence of open registries – most were initially set up in developing countries – the ship owners of the traditional, richer, maritime nations may not have remained in business. The flags of Liberia, Marshall Islands and Panama were first and foremost used by ship owners from the United States, Europe and Japan.

In the European Union, the “anti-trust immunity” of liner shipping conferences was significantly weakened with a view to increasing competition and reducing freight rates.

Example #3: Are policy makers more concerned about the nationally flagged fleet or about the attractiveness of their national seaports? In many countries, maritime cabotage (i.e. shipping between two national seaports) is still reserved to nationally flagged ships. This protects the national shipowners and seafarers who are employed on nationally flagged ships. It may even help to generate business for national ship yards, if the legislation includes the obligation to deploy nationally build vessels on cabotage services. At the same time, such limitations put national ports at a disadvantage when competing for transshipment services. In Malaysia, cabotage restrictions were softened in order to help national seaports compete better with Singapore for transshipment from and to other Malaysian ports.

In conclusion, it is no longer a policy choice to support “the” maritime sector, but the challenge is to identify and support selected maritime businesses. Policy makers need to carefully assess 1) the competitive environment for each of the maritime sectors individually it wishes to develop; 2) the value added of a sector for the country’s economy including possible spill-over effects to other sectors - maritime or not; 3) assess existing and potential synergies between maritime businesses; and 4) design industrial policies to support the businesses the country wishes to develop.

Further reading: The article makes use of the latest available data, including for example world fleet data available under http://stats.unctad.org/fleet. Earlier research on the topic of national maritime profiles includes UNCTAD, Review of Maritime Transport, in particular Chapter 6 of the 2011 issue, which focuses on “Developing countries’ participation in maritime businesses” (http://unctad.org/rmt), and Shashi Kumar and Jan Hoffmann, Globalization: the Maritime Nexus, in ed. Costas Grammenos, Handbook of Maritime Economics and Business, 2nd ed. (London: Informa U.K. Ltd.), 2010.

The implementation of the Taman port project will facilitate the process of diversion of Russian cargo out of Ukrainian ports.

Example #2: Is the priority the shipper, i.e. the importer and exporter, or rather the service provider? In several countries, still today liner shipping companies are allowed to engage in so-called “conferences”, which may include the joint setting of freight rates. Shippers generally consider that such price fixing is detrimental to their interests, while shipping companies argue that this helps them to provide better services at a more stable freight rate.

“ Policy makers are well advised to identify and invest in maritime sectors where their countries may have a comparative advantage.

Photos Courtesy of Jan Hoffmann

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Dr. Jan Hoffmann, Chief, Trade Facilitation Section, UNCTAD

Dr. Jan Hoffmann works with UNCTAD in Geneva since 2003, currently as Chief of the Trade Facilitation Section. Jan is in charge of various technical assistance projects and teaching programmes, the coordination of the Review of Maritime Transport, the LSCI, and the Transport Newsletter. He is on the editorial/advisory boards

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Patrick DonnerActing Vice-President

(Academic)

World Maritime University

“I welcome THEMARITIME Economist as a forum for young scholars and professionals for

presenting their research work, novel concepts and innovative findings.

of MEL, MPM, INCU, and IJSTL, the committee of the Geneva Propeller Club, and treasurer of the Club Photo International. In 2014, Jan was elected president of the International Association of Maritime Economists (IAME). Before joining UNCTAD, Jan spent 6 years with UN-ECLAC in Santiago de Chile, and 2 years with IMO in London and Santiago. Prior to this, Jan worked as assistant professor, import-export agent, consultant and seafarer. His family background is from a tramp shipping company, where he experienced the “flagging out” of a German-owned ship to Antigua and Barbuda. Jan has studied in Germany, United Kingdom and Spain, holding a PhD in Economics from the University of Hamburg. He has three sons and one wife.


Recent Strategic Developments for Shipping CompaniesProf. Dr. Dr. hc (mult.) Peter LorangeChairman, The Lorange Institute of Business Zurich

Profession & Practice

It is known that many businesses differ when it comes to degrees of capital intensity – but traditional shipping is typically very capital! It is also known that many businesses tend to differ when it comes to how close they are to customers – here again, traditional shipping tends to operate in markets that are more or less open, often with little in-depth customer contact. The owner with the lowest costs secures the business! Atomistic! This has been discussed extensively by several scholars, including Stopford (1997), Lorange (2009) and Korakitsos and Varnavides (2014). Further discussion of recent key issues can be found in Talley (2012) and in Winter, Henning and Gerhard (2013).

The Classical Shipping Company: Relat ively high capital intensity and relat ively low customer closenessFor this shipping firm, which is what we classically tend to find, the way to compete would be on price. What drives a particular shipping business segment would

be the supply/demand (in)balance cycles. Thus the freight rate (and, its derivative) the ship second-hand market, are having various sorts of wave-like-shapes.

Timing is the key determinant to business success here; In/out, long/ “The theory of shipping cycles so far has been shaped primarily by two models, the Tinbergen – Koopmans model and the Beenstock – Vergottis model” (Karakitsos and Varnavides, p. 209) “The former’s primary contribution is that shipping cycles arise event if demand for shipping services is not cyclical” Karakitsos and Varnavides, p. 209). The latter model is the first systematic approach to explain the interaction of the freight, time charter, secondhand, newbuilding and scrap markets under the twin assumption(s) of rational expectations and market efficiency (Varakitsos and Varnavides, p. 209). A good summary article has been written by Glen (2006).

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voice of professionals

So, to have a basic feel for the shape of the relevant freight cycle pattern that applies for this shipping segment is key short!! A good heuristic is to enter the market near or at the bottom – through chartering in and/or purchasing tonnage, and to get out near or at the top through selling or/and chartering out. Another heuristic is to go long (long-term charters) near or at the top of the freight cycle, and to go short (spot) near of at the bottom. In theory, this is simple – but, in real life, rather hard!

It is, of course, impossible to have an exact picture of the shape of a future freight market cycle. There are, however, forecasting services, such as the one offered by Marsoft. Major ship brokers also tend to offer forecasts. But, above all, it seems critical for a ship-owner not to spread him/herself over too many different shipping market segments, but to concentrate instead on a better in depth understanding of just one, or a few. Cognitive limits easily set in! Unfortunately, many ship-owners, may under estimate the complexity of this task!

would be “goldplating”, i.e. to maintain unnecessarily high quality levels, which would not be paid for.

Recent research (Libert, Wind and Fenley, 2015) indicates that valuation of corporations can be made by classifying them according to relative degree of customer intimacy. They examined 40 years of financial data for the S&P 500 companies, and found that “asset builders” (relatively high capital intensity, and relatively low customer intimacy) would on the average have a price to revenue ratio of 2,0, while in contrast, “network orchestrators” firm (relatively low capital intensity and relatively high customer intimacy) would have an average multiplier of 8,2.

The “in-between” firms – “service providers” (low capital intensity / high customer intimacy) would score 4,8. In Exhibit 1, we have indicated how this might apply to shipping companies – with traditional shipping firms being analogous to “asset builders”, and the niche players being analogous to “network orchestrators”.

Innovations are, of course, important in the shipping context too, but in a different way than what we would elsewise tend to find. What is important here is to strive for one’s ships to meet a certain minimally acceptable standard, often set by major users of shipping services (oil company majors, coal/ore shippers,.). This firms put certain owners/ships on lists of approved tonnage, others not. To be innovative enough to satisfy this evolving floor of what is a minimum level of technical acceptance is key. To have higher standards than this 25

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Let us now discuss how we might decrease capital intensity, and for also how to increase the closeness to the customers intensive. Innovations seem to provide a key to both challenges! Therefore, let us now first briefly discuss the process of innovations.

The Process of Innovations

We might distinguish between three major types of innovations:• Business maintenance Innovations. These

represent the minimum necessary to stay in business, to remain competitive etc. This is also what we discussed as the minimum needed when following an in/out, long/short atomistic mode of competition.

• Business Enhancement Innovations, These represent ways of strengthening one’s particular shipping business by tailor-making more – what we typically would characterize as niche shipping. While the basic ship design might remain, there might still be important innovations to be had to meet given customers’ needs.

• Disruptive Innovations: are innovations which fundamentally change a given business, such as the introduction of container ships instead of conventional liner ships, double – hull tankers (for pollution safety reasons), etc. Christensen (2000) has come up with this term. While such innovations might be highly advantageous they tend to be rare to find/ hard to come about. Typically entirely, new competences shall have to be brought into a shipping company, to achieve this. This might be having to do with new technical dimensions, say in materials science; engineering, aquadynamics, logistical expertise…

What can slow down innovations?

Conventional thinking often represents a major impediment to innovations in the shipping firm. “We have always done it this way, so why change?” Unfortunately many clients also tend to act in rather conservative ways. Related to this is the high desire

to aim at safety, and that things must function when it comes to the logistics function. So, why take any risk here, by innovating beyond what might traditionally be seen as safe limits? We might list many such defensive factors contributing to the dampening of one’s innovative drive.

How then can one become more active in making use of innovations as a competitive weapon? To form cross-disciplinary groups, which also might have the ability to work with lead customers in coming up with innovations relevant to them, is key. To pick such lead customers is therefore essential, i.e. progressive, open – minded ones! And to establish a team that is able to develop good relations with a particular key customer is also a necessity. In this way, the two sides might be able to interact so as to have relevant innovations come about!

This mode of competition, i.e. based on effective innovations, is particularly key for the relatively low capital intensive / relatively high customer closeness shipping business segment. But here too, of course, timing is still relevant- especially for purchasing of tonnage and / or for making technical modifications, but the innovative dimension is still relatively much more fundamental!

How to Decrease Capital Intensity?It has been understood for some time that capital intensity might be reduced by chartering in tonnage instead. I have earlier argued for the split between owning steel (i.e. owning ships) vs operating steel – many shipping companies as well as many liner – or

“ It seems critical for a ship-owner not to spread him/herself over too many different shipping market segments, but to concentrate instead on a better in depth understanding of just one, or a few. Cognitive limits easily set in! Unfortunately, many ship-owners, may under estimate the complexity of this task!

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pool-companies (Lorange, 2009). Typical ways to go about to implement this would be to charter in tonnage rather than to own it – on t/c or b/b charter. A variation of this might be to structure a so-called sale/lease-back deal, involving that the owner sells a ship and takes it back, typically on a long b/b charter at a given rate. After a certain period of time, typically quite a long one (say 10 years) then the owners shall often have a put option, so that the ship can be forced back to the previous owner at a given price, thus giving the new owners a relatively clear minimum return on the project. The original owners typically have a call option, giving them the right to take the ownership of the ship back if the freight rates have gone significantly up during this time period.

Some shipping companies plan their fleet accordingly: The newest, most innovative ships are owned. The somewhat older ships are sold and leased back. The oldest ships in the fleet are then finally sold, and eventual ad hoc needs would be covered through occasional chartering in. In this way, the newest ships are owned, and older ships are being disposed of in an orderly manner.

There are, of course, cases where the old ships still might have a useful value for a potential competitor. In cases such as this the ship owner might want to be reasonably sure that the ships to be sold do not end up in the hands of potential competitors – new or existing. To sell to parties that are not set up to compete with the seller thus then then become key – even if the selling price is lower than what it elsewise might have been. Typical issues for the seller to assess in this respect are: does the potential buyer have the specific links to key clients, similar to what the seller might have? If not so, it may be hard for the purchaser to become as effective new competitor

We see from the above that innovations are critical, particularly in order to succeed when it comes to shipping niche strategies (in contrast to traditional shipping strategies, which are driven by good timing regarding “in/out”, “long/short”). How can we approach this in effective ways?

Increasing the customer closeness

Traditionally many shipping companies have worked through ship-brokers as a way to interface with one’s customers. And, many traditional ship-brokers have been following business models which essentially are based on responding to requests from those who have needs for transportation by attempting to identify suitable tonnage and to offer this at a suitable price – as high as possible without losing the deal. This is thus essentially a business mode to compete on costs. The customer is to be understood through an “inside-out” set of lenses – as long as the best possible set of rates is offered to the customer and accepted by him, then, further specific dimensions ideally desired by any customer would be irrelevant.

A closer relationship with the customer might be seen as an “outside-in” one. Here, the specific needs of a given customer must indeed be met. To listen to a customer, and to actively dialogue with him (“let us sit down and reason together”) becomes key (Branson, 2014). How can this be done? Above all, a close interpersonal relationship would typically be an advantage – to build trust, based on willing demonstration of relevant capabilities. For the ship owner this would imply having capabilities to solve what a customer might see as the most pursuing specific problems or challenges. And, for the customer the task would be to allow the specific experts the freedom to dialogue with his/her counter-parts at the shipping company. Often, this might not be the case! Rather, instead, the dialogue might be channeled through the customers’s chartering-in department!

The shipping company – specific customer dialogue is often technical in nature, focused on coming up with better solutions. Often this might result in building new tonnage, or modifying existing one, to come up with tonnage with specific capabilities tailored to these needs.

The ship owner – key customer dialogue should be ongoing, both so as to ensure that the link is strong enough not to break down in case of disappearance 27

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of a specific executive (job rotations, termination, retirement, death, …). Even more focus on how to continually improve a given approach is key. Innovations that come out of this continuing dialogue should be split, to benefit both sides.

Some examples

Let us finally give some examples, all from Norway, of several shipping-related companies. These might fall into the strategic categories we have identified. We see that it seems to be only in the classical shipping company mode that owning ships is key. To make appropriate acquisitions, constructing of new ship, selling some of one’s tonnage becomes key, It is a matter of practicing in/out, Long/short!

At the other extreme we have Western Bulk which essentially owns no ships – the business model of Seaspan in the key asset!

Conclusions

We have seen that classical shipping does not typically yield strong average earnings (see, for instance, Karakitsos and Varnavides, pp 329-330). Strong execution of in/out, and/or long/short decisions are key to achieve a reasonable financial return. We have seen, also, however that to lessen the capital intensity of one’s strategy, together with increasing the closeness to one’s target customers can increasingly improve financial returns. However, this assumes that the shipping firm is able to come up with and execute relevant innovations, on a timely basis (Christensen, 2000).

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References

Beenstock, M., and Vergottis, A. (1989a) “An Econometric Model of the World Market for Dry Cargo Freight and Shipping”, Applied Economics, 21, 339-56Beenstock, M., and Vergottis, A.(1989b), “An Econometric Model of World Tankers Market”, Journal of Transport Economics and Policy, 23, 263-80Beenstock, M., and Vergottis, A.(1993) “Econometric Modelling of World Shipping”, London: Chapman & HallBranson, R “The Virgin Way”, Random House, 2014.Christensen, C. “The Innovators’ Dilemma”, Harper-Collins, N.Y., 2000Glenn, D.R. (2006) “The Modelling of Dry Bulk and Tanker Markets: A Survey”, Maritime Policy & Management 33, 5, 431-45.Karakitsos, E. and Varnavides, L. “Maritime Economics: A Macroeconomic Approach”, Palgrave Macmillan, 2014Koopmans, T.C. (1989) “Tanker Freight Rates and Tankship Building” Haarlem, Holland.Libert, B., Wind, J. and Fenley, M.B., “The Network Revolution: What all Leaders can learn from Aribnb, Uber and Alibaba”, Harvard Business Review, forthcoming, 2015Lorange, P. “Shipping Srategy: Innovation for Success”, Cambridge University Press, 2009Stopford, M, “Maritime Economics”, Routhledge, 1997.Tinbergen, J. ”Ein Schiffbauzyklus”,Weltwirtschaftliches Archiv, Vol. 34, pp 152-164, 1931.Tinbergen, J. „Scheepsminute en Vrachten“, De Nederlandsche Conjukturen, pp 23-35, March 1934.Wayne, K. and Talley W.T., „The Blackwell Companion to Maritime Economics”, Wiley- Blackwell, 2012.Winter, H., Henning, C. and Gerhard, M., “Grundlagen der Schiffsfinanzierung” Frankfurt School Verlag, 2013.

Peter LorangeChairman, The Lorange Institute of Business, Zurich

He is the owner and the president of the Lorange Institute of Business and one of the world’s foremost business school academics. For 15 years, he was the President of IMD, Lausanne, one of Europe’s leading business schools. Mr. Lorange was Professor of Strategy at IMD and held the Nestlé Chair and then the Kristian Gerhard Jebsen Chair of International Shipping. In addition to his academic background, Mr. Lorange has been a director on several listed companies. Moreover, he has written or edited twenty books and some 120 articles. His area of special interest is global strategic management, shipping company strategies, management of academic institutions, strategic planning and entrepreneurship for growth.

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Has the shipping industry become victim of its own success?Dr (Capt) Suresh Bhardwaj, fics,fni,fcmmiResident Director, Maritime Training and Research Foundation, Chennai


The yardstick for the success of shipping industry is the declining cost of freight that renders the global supply chains cost-efficient and contributes to the increased globalization. Initiatives like economies of scale and efficient port operations not-withstanding, other measures to reduce cost of operations to bear low freights takes its toll on safe ship operations. Governance of the industry is then through enforcing minimum compliances to regulatory requirements. Regulatory requirements in turn, emanate from accident investigations. The paper builds on this root-cause analysis and delves deeper as it runs into some questionable fundamentals of risk management within the shipping industry.

Negl igible cost of freight

Undoubtedly the shipping industry contributes immensely to the cause of globalisation as noted in the UNCTAD Review of Maritime Transport (2014, Figure 1.1). Shipping services being a derived demand, its performance goes in tandem with the global economic activity represented in terms of GDP, manufacturing index and merchandise trade. However, over last few years the merchandise trade is seen to have grown twice as fast as the world GDP, which is reportedly due to the multiplier effect resulting from the globalization of production processes, increased trade in intermediate goods and deepening and extension of global supply chains (UNCTAD,2014). Notably, the Review also records that 53 % of world bulk carrier fleet (in DWT terms) is new investment (age 0 – 4 years).The return on investment for the shipping companies however, has been far below the expectations. The current market condition for Bulk carriers is deplorable as reflected in the table below:

SPOT TC AVG 1 (USD) Capesize Panamax Supramax On 4th March 2015 (USD) 4979 4615 5755 ONE YEAR AGO (USD) 22295 8502 11727 Source: (http://www.dryships.com/pages/report.php) 1 Spot TC Average = The Average Value of the Main Shipping

Routes applicable for each of the 3 types of ships

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Crit ique on Global isat ion

Contrary to the development theories that conceived development as ‘national development’, present notions underlying neo-liberal economic development being pushed through globalisation, re-conceives development as global competitiveness within the global market place (Onder, 1998). Significantly, the race to the bottom hypothesis argues that states in their competition to attract mobile capital must converge to the lowest common denominator. Globalisation is always accompanied by liberal democracy, which facilitates the establishment of a neo-liberal state and policies that permit globalisation to flourish. Its main driving forces are institutions of global capitalism, but it also needs the firm hand of states to create enabling environments for it to take root. A growing amount of literature on social dimensions of globalisation shows that many are wary of the so-called benefits of globalisation (Jenkins, 2004; Servais, 2004; ILO, 2004). Labour fortunes are undermined by an ideological discourse that upholds profit as a sign of efficiency that will generate the required levels of productivity to sustain economic growth for national development. To succumb to labour demands or interests would render an economy inefficient and directed towards failure, thus making out labour ‘standing in the way’ of national progress if it insists that its interests should be considered. In this way, while globalisation is about removing state restrictions on capital, it seeks also to control labour by making believe that social protection and job securty are uneconomic and inimical to economic growth (Jenkins, 2004).

Global isat ion and Shipping

The maritime business is no exception to the pervasive forces of globalisation. The ship owner in a

bid to reduce costs flags out the ship to nations that allow cheap crew to be sourced globally through third party management. Under these influences the industry structure becomes fragmented giving rise to ‘split incentives’ of its many actors. This creates failures and barriers in holistic and well-founded development of the industry. Such a fragmented scenario perforce induces regression to a compliance driven culture as the means of governance for the globalised industry. However, the fact that an international regulation is enacted upon a nation by nation basis who remain keen to make their states an attractive choice as regulators, the sovereign privilege creates an unregulated environment where capital is free to act as it pleases (Alderton and Winchester, 2002).

The mandated advancements of safety practices get heavily weighed against economic logic of low costs and returns for each partnering entity. Only accident analysis largely remains the way forward as newer regulations get enacted based on lessons learnt and its avoidance. Such ‘low road globalisation’ practices fuelled by the constant economic pressures severely undermine the seafarers’ capability to negotiate risks associated with the hazardous environment. In conjunction with the competitiveness effect it provides an ideal ground for downward harmonization impacting all aspects of the business operations that derive from the over-worked, fatigued and isolated crew on board the ships (DeSombre, 2008). It needs to be noted that maritime transport is a safety-critical industry. Hence concerns for human safety and environmentally safe operations co-exist with service quality. Shipping produces its service with the ship as its core constituent unit that operates geographically remotely and in a high risk environment and the unknown – out of sight - seafarer lies at the heart of it.

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Are shipping regulat ions based on skewed accident investigat ions?

Barnett, Gatfield and Pekcan, (2006) suggest that accident analysis is relatively immature in the maritime world as little scientific analysis is undertaken to identify the trends and patterns. Even less analysis is attempted in assessing the significance or frequency of organisational factors such as incidence of commercial pressure or effects of organisation culture when categorising causal factors to be human errors of people at the sharp end. Macrae (2009) laments that studies consistently estimated 80% of causes in marine accidents being attributable to human factors which traditionally have been viewed as individual, cognitive or behavioural issues caused merely by ignorance or carelessness, without any recognition of influence of organisational context in shaping errors. Schroder-Hinrechs et al. (2012) while critically reviewing the focus of maritime accident investigations also suggest that organization factors do not receive sufficient attention.

Organisational culture plays an important part in reinforcing the appropriate behaviour required on board. If the organisation’s own shore-based management team pays “lip-service” to its own operating policies by failing to implement them on the vessel and at the same time tacitly accepting or rewarding deviant behaviour (not reducing speed in restricted visibility was a matter of routine), then the individual officers on-board will adopt a similar cultural attitude. A remedial action of simply sending the “offenders” to remedial training would not resolve the root cause to the violation. It is a matter of fact (Bhattacharya, 2009) that managers largely subscribe to the human error theory that assumes workers behaving irrationally or wrongly applying the rule or plain being unmotivated as main cause for workplace accidents and incidents. As a result the corrective actions get directed to tackling seafarers’ behavioural attributes rather than the root cause of accidents which is the commercial pressures of the organization.

Are causes of accidents even constructed rather than objectively looked for?

The error investigations can have differing objectives and purpoes that depends on the investigator’s perspective. Sanders and Neville (1991) confirm that what is deemed to be the cause of an accident depends on the purpose of the inquiry. For example, the accident investigations are commissioned by vessel owners, management companies and more often by Hull and Machinery Underwriters with a sole view for apportionment of liability towards hull and machinery damage of vessels involved in the subject accident for the sake of final settlement of the eventual claim of the vessels towards hull and machinery damages.

Another, and perhaps more damaging reason for restricting the cause of accident to lie on-board the ship itself and not extending to the overarching forces of poor organisation support and practices lies in the liability and insurance regime that covers ‘negligence of seafarers clause’ admissible for pay out of insurance. For example, the Institute Time Clauses – Hulls (1983) (pp 107) on Particular average2 damage to vessel states:6.2 This insurance covers loss of or damage to the subject-matter insured caused by 6.2.3 negligence of Master, officers, crew or pilots, provided such loss or damage has not resulted from want of due diligence by the Assured, Owners or Managers.

This severely restricts the enquiry process of getting any deeper than the human error of those on-board, additionally ensuring that no cause gets relegated to management ashore lest insurance benefits be forfeited.

Concluding remarks

The shipping industry in its measure of success, while contributing to the causes of globalisation, has itself become a victim of circumstances. It is found to progressively regress in its vital safety practices that are seen to result not merely from a deregulated economic and organisational environment, but a

2 Particular average means a partial loss caused by a peril insured against and which is not a general average loss (Marine Insurance Act 1906).

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general decline that has been enabled by various systems of regulation under the strong influences of the prevalent social and economic conditions in the industry that value efficiency and profit over industrial safety.

References

Alderton, T. and Winchester, N. (2002).Globalisation and de-regulation in the maritime industry, Marine Policy, 26, 35-43.Barnett, M., Gatfield, D. and Pekcan, C. (2006). Non-technical skills: the vital ingredient in world maritime technology? Paper of IMarEST, download able from the Nautical Institute’s website at: www. he-alert.org/documents/published/he00515.pdf Bhattacharya, S. (2009). The Impact of the ISM Code on the management of occupational health and safety in the marine industry, PhD thesis, School of Social Sciences, Cardiff University, UK. DeSombre, E. (2008). Globalisation, competition and convergence: Shipping and the race to the middle, Global Governance, (14), 179-198. ILO, (2004). A fair globalisation: The role of the ILO, Report of the Director-General on the World commission on the social dimension of globalisation, Geneva.Institute Time Clauses – Hull. (1983). 6.0 Perils, Available from http://www.rhlg.com/pdfs/guideto hullclaims0703.pdfJenkins, R. (2004). Globalisation, production, employment and poverty: debates and evidence, Journal of International Development, 16, 1-12.

Macrae, C. (2009). Human factors at sea: common patterns of error in groundings and collisions, Maritime Policy and Management, 36 (1), 21-38. Doi. 10.1080/03088830802652262.Onder, N. (1998). Integrating with the global market: The State and the crisis of political representation, International Journal of Political Economy, 28 (2), 44-84.Schroder-Hinrichs, J. Hollnagel, E., and Baldauf, M. (2012). From Titanic to Costa Concordia – a century of lessons not learnt, WMU Journal of Maritime Affairs, 11, 151-167. Doi: 10.1007/s 13437-012-0032-3Senders, J.W. and Neville P. M. (1991). Human error: cause, prediction, and reduction, Lawrence Erlbaum Associates, New Jersey, USA. ISBN: 0-89859-598-3. Servais, J.M. (2004). Globalisation and decent work policy: reflections upon a new legal approach, International Labour Review, 143 (1-2), 185-207.UNCTAD, (2014). Review of Maritime Transport. Report by UNCTAD Secretariat, United Nations: New York and Geneva.

“ It is found to progressively regress in its vital safety practices that are seen to result not merely from a deregulated economic and organisational environment, but a general decline that has been enabled by various systems of regulation under the strong influences of the prevalent social and economic conditions in the industry that value efficiency.

Suresh Bhardwaj Chairman, Resident Director, Maritime Training and Research Foundation, Chennai.

Dr (Capt) Suresh Bhardwaj is the former Pro-fessor Emeritus and Vice Chancellor of AMET (Maritime) University, Chennai, India. He has a PhD in Shipping Management from Plymouth University in UK. He is a Fellow of The Institute of Chartered Shipbrokers, UK; Fellow of The Nautical Institute, UK; and Fellow of The Company of Master Mariners of India. He has forty years of work experience, which includes 5 years as Master of various types of ships and then 25 years of multi-disciplinary shore experience in senior and top management positions spanning the verticals of commercial operations, consultancy, academia and research.

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The Ukrainian crisis: impact on the regional port systemKateryna Grushevska and Theo Notteboom, ITMMA, University of Antwerp, Antwerp, Belgium

FreshMINDS

In this contribution, we discuss how current and recent events and developments in Ukraine and the Black Sea region are affecting Ukrainian ports, more specifically describing the shifts between the Crimean and the continental Ukrainian ports.

Turbulent t imes in Ukraine

After the referendum in Crimea on March 16, 2014 the Autonomous Republic of Crimea became a part of the Russian Federation on March 18, 2014. This event incurred a complete change of legislative and regulatory institutions for ports and railways which before were a part of the Ukrainian state-owned and centrally regulated transport network. Moreover, the tensions in the eastern and southern part of Ukraine are threatening the present integrity of the state. The European Union and the USA continue to put pressure on Russia to help solve the clashes with pro-Russian rebels in the east of the country. The political situation in Ukraine was influenced by the presidential elections on May 25th 2014 won by Petro Poroshenko. In late June 2014, Ukraine and the European Union signed a free-trade pact. Just like Georgia and Moldova, Ukraine has the ultimate goal of entering the EU. However, the EU has made no promise it will allow Ukraine in. The signing of the

pact is a key action as Ukraine’s former pro-Russia President Viktor Yanukovich turned his back on signing the EU agreement in November 2013. His position in favour of closer ties with Russia prompted months of street protests that eventually led to the Ukrainian crisis. The recent events in Ukraine might even turn out to be more significant to the country than the independence from the Soviet Union in 1991.

Figure 1. Black Sea ports

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voice of young generation

During the past half year, the Ukrainian economy destabilised with the local currency devaluating by more than 35 %. The heavy industry activities in the east of Ukraine (Donbas and Poltava Region) are facing hard times. Moreover, the railway paths in the Donbass region and other infrastructural facilities (e.g. in Donetsk) are significantly disrupted by the war making rebels. The Russian-Ukraine trade relations are also affected by the recent turmoil. In a reaction to the trade agreement between EU and Ukraine, Russia has threatened to withdraw the duty-free treatment that Ukraine currently benefits from as a member of the Commonwealth of Independent States (CIS) free trade agreement. If Russia would start to impose customs duties, Ukraine’s exports could be heavily affected (particularly base metals, grains, machinery, equipment and food). Despite the crisis, Russia remains a key trade partner of Ukraine: 24% of its exports are related to Russia. A way out for Ukraine would be to re-export EU products to Russia thereby avoiding possible Russian duties.

Cargo impacts on Crimean ports

The Ukrainian port system is feeling the full impact of the crisis. This section describes the expected intra-Ukrainian cargo flows shifts, more precisely which cargoes are more likely to be rerouted to continental Ukrainian ports and which will stay bounded to Crimea.

Ukrainian ports mainly focus on the handling of dry bulk (agri-bulk, mining and metallurgic cargoes and chemicals), general cargo (containers and heavy industry goods) and liquid bulk. Dry cargo facilities (including dry bulk and general cargoes, but excluding grain and containers) in Ukrainian ports represent 133 mln tons or 51% of the total capacity of the port system. The grain capacity represent another 15% of total ports’ capacities or about 38 mln tons per year. The utilization rate of the cargo handling facilities for dry bulk cargo in Ukrainian ports reached 92% in 2011. For grain facilities, it amounted to 47%.

Figure 2. Geographical location of Ukrainian ports and their handling capacities in 2011Source: adapted from Marine Agency and Crewing company “Sif-Service” and Centre of transport strategy cfts.org.ua (Kiev, Ukraine)

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A recent acute problem that Ukrainian ports are facing is the lack of available port handling capacities to handle the imported coal from overseas. In about half year time, Ukraine turned from a coal exporting country into importing coal country, because of the rebels’ actions in the industrial hart of Ukraine.

There are five ports in Crimea: Yevpatorya, Sevsatopol, Yalta, Feodosiya and Kerch. There are several factors affecting cargo traffic rerouting in these ports:

• There is a clear reluctance of foreign cargo owners to send cargo via these ports. They will most likely prefer more stable Ukrainian ports such as Odessa, Yuzhnyi or Illyihevsk. The main cargoes handled in Crimean ports were grains (mainly in Avlita port for the global traders such as Kernel, Luis Dreyfus etc) and metals by SCM holding (in Avlita).

• Crimea is facing challenges with hinterland connections. The only way to avoid a transit via Ukraine is by ferry via Kerch port to Taman and Caucasus port of Russia.

• The Plans for the Kerch bridge have been revived (estimated cost about RUB 50bn or US$3bn) and the construction is expected to take 3-4 years. However, no real investment plans were officially published.

• The capacity of Kerch port is very low because of several reasons: (i) the current daily loading/unloading capacity is about 50 wagons; (ii) there are about 200 km of one direction non-electrified railway. Assuming that in over four years there will be a bridge connecting the Crimean territory with the continental part of Russia, the maximum capacity of the whole transportation corridor (Taman-Kerch-Feodosia) will reach 12-15 trains per day (CFTS).

• The depute Prime-Minister of Russia Rustam Temirgaliev recently communicated that the ports of Feodosiya and Yevpatoriya are going to be closed, and a new road will be constructed between Yalta, Alushta and Feodosia. These developments among others are expected to be

included in the “Project of Territorial planning of Crimea” that was presented to the Government of the Russian Federation for final approval on June 1, 2014. The reasoning behind the closure of these two ports, as explained by the Minister of Transport of Crimea Yuriy Shevshuk, is that the cargo handled in Crimean ports was mainly to/from the continental part of Ukraine. As Crimea has become literally isolated from the continental part of Ukraine, the future port volume prospects are low, unless the political relations between Ukraine, Russia and Crimea improve.

The prevailing cargo type for Crimean ports was oil fuel and oil products (4.2 mln tons in 2013). The ports involved in the liquid bulk handling were Kerch (1.9 mln tons), Feodosiya (2.1 mln tons) and the remaining share was shipped via Sevastopol. Most of the oil and oil products were transit cargoes, originating from Russia and Kazakhstan. About 15 mln tons of liquid bulk (exports of Russian oil and oil products) are handled offshore in the Kerch strait. As it concerns cargoes with a Russian and Kazakh origin, it is likely that these cargoes will continue to be handled via Crimean ports. However, port operations at Feodosiya have a big probability of being suspended due to new governmental policy.

Experts believe that the 7% of the metal products of SCM holding that were handled in Avlita (private terminal in Sevastopol port) will be redirected to Odessa/Yuzhnyi ports (see also www.cfts.org). The redirecting of these metal cargoes to ports in the Azov Sea (Berdyansk, Mariupol) is less viable, because of their limited draft and ice conditions in winter time. Moreover the passage via Kerch strait is operated by the Russian pilotage agency, and all


FreshMINDS “ Taman Port project can generate a cargo shift from Baltic gateway ports to Black Sea gateways in view of reaching the Russian hinterland, particularly since sailing from the East toTaman port would require 12 sailing days less than to Baltic ports.

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shipping activities are affected by the political agreements between Ukraine and Russia.

According to the experts and business representatives from Ukrainian ports, the grain terminals on the continental part of Ukraine have enough capacity in place to welcome the rerouted grain flows previously handled in Crimean ports. The main terminals are located in the Great Odessa region (ports of Odessa, Yuzhnyi and Illichevsk). The total terminal capacity amounts to 50 mln tons per year with a draft of 18-20 meters.

There are several Crimean ports handling sand and cement: Sevastopol Fishery port, Yevpatoriya, Yalta and Kerch. There might occur complications with the export of construction materials (mainly sand) with a Crimean origin at the local company Suesta which operates via its private port in Kamyshovaya bay in Sevastopol Fishery port (export per year 800,000 tons). In the surroundings of Kerch port there is a private cement factory owned by Altkom said to be owned by Aleksandr Tyslenko. Moreover, this factory has a dedicated deepsea terminal for handling 4 million tons of cement per year. Cement is not officially recorded in the statistics of Kerch port. So, when it comes to the export of cement and sand the ports may still remain at the same level because of the locational proximity and transport costs, though the enterprises owned by Ukrainian businessmen are expected to be affected. Note that people having businesses in Crimea cannot be citizens of Ukraine, except if they are Crimeans. Recently the Ukrainian parliament accepted a law on “the rights and freedoms of citizens in the temporarily occupied territory of Ukraine”.

The only port that received considerable import cargoes was Yevpatoriya. It mainly concerns roro cargoes (about 33,800 cars were handled in 2013). Apparently these cars will not enter via Crimea anymore, because of the isolated and limited

consumer market and because of the recent intention of the local government to stop all cargo operations in Yevpatoriya port.

Russian cargo transit ing at Ukrainian ports?

Russia remains an important country for the Ukrainian port system. Russian cargo (export) through Ukrainian ports amounted to 27 mln tons in 2013 or about 18% of total Ukrainian port traffic. This figure includes 11 million tons of Russian coal and ore (about 25% of total coal and ore traffic in Ukrainian ports). The port of llichevsk handles almost all ferro-volumes with a Russian origin (1.8 mln tons). Most other Russian cargo passes via the Great Odessa ports. The container flows transiting to/from Russia and handled by Ukrainian ports are very small mainly because of the Customs bureaucracy in Ukraine.

Since many years, Russia has developed plans to build a new Greenfield port, i.e. Taman, in the eastern part of the Black Sea. The port should be operational in 2020. Given the recent Ukrainian crisis, it now remains unclear whether Russia will go ahead with the plan to build Taman Port or, alternatively, might opt for a further development of the port of Sevastopol in Crimea. Recently the economic advisor of the President of Russian Federation informed that they are currently reassessing the infrastructure investments for this year (USD$ 3 bln or RUB100 bln). These investments were initially planned for the Taman port construction and the bridge construction over the Lena River. A decision on the infrastructure investments will be taken soon. In our view, the large Taman project seems to be more important for the Russian Federation. The port is planned to have a draft allowing vessels of up to 150,000 DWT, a total capacity of 50 mln tons in Phase 1 (ultimate capacity is about 100 mln tons), facilities for dry bulk, general cargo and containers, no weather delays (unlike Novorosiysk) and rail and road connections (unlike Novorosiysk).

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to Baltic ports. It is important to mention that 60% of the Russian population is closer to the Black Sea than to the Baltic Sea. During USSR times 70% of USSR cargo was shipped via Black Sea ports (with Odessa and Illichevsk now being part of Ukraine). It seems the Black Sea ports, particularly Russian ports, will regain their key position to accommodate Russian cargo.

Kateryna Grushevska, ITMMA (University of Antwerp)

Theo Notteboom, ITMMA (University of Antwerp)

Theo Notteboom holds a full-time position as Foreign Expert / Professor at Dalian Maritime University in China, part-time academic positions at ITMMA - University of Antwerp and the Antwerp Maritime Academy in Belgium and visiting professorships at WMU/SMU in Shanghai and Nanyang Technological University (NTU) in Singapore. Between October 2006 and October 2014 he was President of ITMMA of the University of Antwerp. He is Emeritus President and Council Member of International Association of Maritime Economists (IAME). He has published widely on port and maritime economics. He is Associate Editor of the academic flagship journal Maritime Policy & Management and a member of the editorial boards of six other leading academic journals in the field. He is co-director of www.porteconomics.eu, a knowledge dissemination platform on port studies.

Kateryna Grushevska joined ITMMA of the University of Antwerp in 2013 as a PhD student under the BACKIS scholarship programme of the European Commission. She holds a MSc in Management from Odessa Maritime University and MSc in Transport and Maritime Economics from ITMMA. Her research activities at ITMMA particularly focus on ports and logistics in the Black Sea region.


The implementation of the Taman port project will facilitate the process of diversion of Russian cargo out of Ukrainian ports. It will also facilitate the introduction of direct calls to Russian ports. This development can even generate a cargo shift from Baltic gateway ports to Black Sea gateways in view of reaching the Russian hinterland, particularly since sailing from the East to Taman port would require 12 sailing days less than

FreshMINDS

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comments & praises

K. Denise Rucker KreppFormer Chief Council for U.S. Maritime

Administration (MARAD)

As a former U.S. Maritime Administration Chief Counsel, I’m delighted with the creation of the new Maritime Economist Magazine. There is a significant gap in information concerning the economic burden of government regulations on the maritime industry. After September 11, 2001, countries around the world imposed strenuous new security requirements – assessments, plans, and exercises. More recently, vessels owners were tasked with improving environmental standards for ballast water and air emissions. All of these changes cost money and owners and operators are the ones paying for it.

An additional economic burden is created by the government’s failure to coordinate oversight activities. The U.S. maritime industry is subject to rules and policies issued by the U.S. Coast Guard, U.S. Customs and Border Protection, the Environmental Protection Agency, the Transportation Security Administration, the Maritime Administration, and the Occupational Safety and Health Administration at the federal level, the number goes up when you include state agencies. I’ve worked for three of these agencies and have personal experience on how they move out independently without picking up the phone to talk with one another. For a federal employee, the failure to communicate is frustrating. This failure translates however into lost revenue for the maritime industry when they have to deconflict opposing guidance.

The Maritime Economist Magazine is going to provide an excellent venue for both scholars and professionals to publish innovative work and question current debates such as the growing economic cost of government regulations. Scholars may capture a holistic picture of the maritime industry. They aren’t going to weigh one factor more than another. Instead, they are going to look at the entire picture and provide recommendations based on sound data. This data can then be used by legislatures to improve current government processes; a much needed win for the maritime industry.

THEMARITIME Economist is going to provide an excellent venue for both scholars and professionals to publish innovative work and question current de-

bates such as the growing economic cost of government regulations.


Emerging Maritime TechnologiesBekir SAHINMaritime Department, Istanbul Technical University, Istanbul, Turkey


FreshMINDS

New technologies regarding to energy efficiency, air pollution, waste treatment, safety, navigation and emergency have been developed for a long time. These technologies might focus on navigational, operational, capacity enhancement, hull & propeller improvements, bulbous bow & surface designs, energy and systems. Ship-owners generally tend to consider new technologies based on International Maritime Organization (IMO)’s mandatory regulations and standards such as MARPOL, SOLAS, COLREG and etc.

This is a fact that new technologies in maritime field as being in all other sectors provide long-term financial benefits. Ship owners will take this into account increasingly every passing day. The following example demonstrates the significance of investing to the new technologies. The Marine Environment Protection Committee, IMO (MEPC 60/4/36 ANNEX 2) has presented a cost-benefit analysis for prevention of air pollution from ships. It offers some new technologies such as (1) optimization of superstructure for reduction of air and wind resistance (2) optimization of stern shape for reduction of wave making resistance by shape of stern (3) low friction coating, air lubrication method, stern duct, and stern fin for reduction of friction resistance

(4) corrosion resistant products, pre-swirl fin and hybrid pod for improvement of propeller efficiency (5) stem duct, pre-swirl fin, spritstern and post-swirl system for improvement of propulsion efficiency by shape of stern.

According to this, in case of investing possible combinations of the proposed new technologies, an 84.000 DWT tanker will provide %25.9 energy efficiency within the years of 2018-2022 and %37.3 for 2023-2027. The estimations of fuel oil consumption of main engine for 8-year period will decrease from 114.036 to 71.533 tons. If bunker price is assumed 400($/t) with interest rate of 2.0 (%), fuel cost reduction for 8 years will be 10.80 (M$) in the years between 2018-2022 and 15.54 (M$) for 2023-2027.

Accordingly, MEPC (MEPC 67/INF.9) has declared the costs of the projects on new technologies for energy efficiency. The list of energy saving potential declares that costs for 18 out of 23 projects are negligible, zero and low. Similarly, the savings for 20 out of 23 projects are high and medium. Even if the cost is high, its savings are high. Therefore, new technologies provide much more benefit than expected after choosing the appropriate project with its high performance and applying it with careful planning.

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Another issue to be considered on board ships is to introduce the new technologies to crews. This is certain that new technologies improve efficiency and effectiveness of watch keeping and improve safety of operations. Therefore, training is required for the seafarers to physically operate the new systems in order to make better decisions. The Marine Safety Committee (MSC/Circ. 1091) has noted the significance of training requirements for new technologies and importance of using high-tech navigational operational and managerial equipment as well as subjects for use of information and data during routine ship operations and emergencies.

Technology is improving continuously and new products facilitate our lives. We have experienced several innovations, designs and radical changes through the maritime history. Then, what kind of new technologies are expected in the future?

Drones: Drones are small, cheap, fast and easy to use and can help mariners with several aspects. First of all, seeing a dropped passenger or crew from the air, his/her approximate location, whether or not s/he is alive. Second, drones can capture multispectral images to determine the oil leakage, depth, and even whales in order to prevent strikes to hull. Drones will come for oil and gas exploration and production in the far north. Drones can carry something if it is needed in a predefined amount.

Many scenarios may be created, for example, carriage food without mooring, or carrying medicine to another vessel if it is needed. Finally, radars may have deviations in the some particular places such as Polar Regions. Therefore, in order to detect the probable obstacles such as debris, iceberg, rocks etc. Radars are limited and it works with echoes, eyes are limited with the two or three miles, approaching pirate attacks can be known by using drones. In the near future, everybody will have a drone like smart-

phones, and especially at the commercial point of view, drones will take a significant role in every steps of marine transportations.

Oculus Rift: Simulator centers are a requirement for young students as ocean-going master candidates. However, with Oculus Rift’s virtual-reality technology, all students may/will have their own simulators. Think that you are lying on a bed in your room but simultaneously you are a captain of 400 m ocean going container vessel. Ocean currents, rain, whales, currents and whatever you want. Yes, you feel you’re actually inside these environments when using Oculus


Rift. This very improving and cheap technology will trigger to re-think the education of maritime faculties.

Mobile col laboration: Internet is either too slow or no connection in the vessels. We will experience in the near future that everywhere including oceans in the earth will be inside the coverage range. Thus,

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at 03:00 am, a ship-owner can instantly see where his ship is and communicate the officers whether or not there exists some problems. Cargo tracking, environmental conditions, crew management will be on the only one screen of the smartphones.

A maritime shipping firm can easily share a file or document by using cloud based storage services for example, via Dropbox, Google Drive, OneDrive and etc. Crew will file legally binding applications by word-processing programs. The remote lectures for crews will be possible in the future. In the emergency cases, by using chat apps, the doctor will be able to see the sufferer and direct others to do something. Big meetings, one-by-one conversations, will be conducted by mobile collaboration.

Green shipping and alternative energy sources for the vessels: The main purpose of new technologies for reduction of air emissions either of CO2,NOX, SOX or particles. These technologies vary from machinery, propulsion, operation and logistics base. In order to realize green shipping, new energy sources are investigated for a long time. Wing sails, wind

solar, kites, electricity in ports, biodiesel, wind turbines, photovoltaic panels and hydrogen fuel cells will be more common in the future.

Technologies for arct ic: Due to global warming, newly opened routes in the Arctic region are interest of shipping companies. Therefore, offshore platform development, Arctic exploration, dynamic positioning and shortest path subject to zero risk are emerging technologies for Arctic transportation and exploration.

Instant stopping technology for vessels: Marine accidents are the worst cases of the maritime transportation. Marine accidents cause cargo damages, lose of human lives as bad as environment pollution. If we look at from side of the vessel, the main reason for occurrence of these casualties (collision, grounding and etc.) is not being able to stop the vessel instantly. If the vessel is at the collision position, the only thing to do is having the best position, which results with the minimum damage. Also, it requires special skills for the master mariners to stop these moving islands in such scenario.

For this problem, rather than rudder and propeller, new hull designs are required. In the future, we will see the new-design finned vessels like fish. These fins will help stopping the vessel instantly and designs of these fins will vary from vessel to vessel. When the fins are opened, huge amount of seawater will move against the fins, which is opposite direction of the vessel. Then the vessel forcefully will stop instantly. There will be no need for extra space and too much cost for these designs. Moreover, these new designs will decrease the mooring time.

FreshMINDS

“ There exist many new innovations and technologies; therefore, technology selection is vital for the ship-owners and shipping companies.

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3

Bekir Sahin,Istanbul Technical University

Bekir Sahin is a Research Fellow at Istanbul Technical University, Istanbul, Turkey. He received his B.Eng of Maritime Transportation and Management Engineering (MTME) from Istanbul University, Turkey in 2007, and his MSc of Engineering Technology from University of Houston, U.S. in 2011. Bekir Sahin is currently a PhD candidate of Maritime Transportation Engineering at Istanbul Technical University. His research interests are marine technology and technology management in the shipping industry. He has several published journal papers as well as conference presentations on technology management, technology selection process and engineering technology in the shipping industry. He is married to Banu with a daughter. He can be contacted at bekirs66 (at) gmail (dot) com.


Marine threat and monitoring technology: The software technology for marine threat and monitoring systems will have a high impact. Communication systems, user interfaces and target detection issues are the main emerging technologies in this field.

There exist many new innovations and technologies; therefore, technology selection is vital for the ship-owners and shipping companies. In order to attract the importance of this subject, a scientific article is presented at XII. International Logistics and Supply Chain Congress, 30-31 October 2014, Istanbul, Turkey, titled “An Approach For Technology Selection Problem In Maritime Logistics”. According to this paper, in a conventional holistic approach, technology is firstly selected in terms of its cost. However, in the step-wise manner, other factors such as reliability, ergonomics, portability, financial, safety, environmental dependence and operation including future vision directly involve in to the selection process. Three main

Unmanned autonomous vessel and marit ime robotics: Legged machines and humanoid robots will make the ship and cargo operations easier and quicker. Agile and walking robots will be used in emergency rescue operations, for routine jobs onboard, carriage and transferring cargoes and etc. Unmanned autonomous vessels will play a significant role in warfare. Moreover, fly boards will be observed for rescue operations.

approaches (casual, re-active and pro-active) that the maritime companies adopt are defined and applied to the investment of new technology selection process.


Photos Courtesy of Bekir Sahin

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Peer Review as an essential part of scientific publishingSelf-perpetuating research and Flip side of peer reviews

Okan Duru, Ph.D.

CHALLENGE

‘How to Review a Paper’ was the title of a special session at the 2014 Conference of International Association of Maritime Economist, Norfolk VA, U.S. Mary R. Brooks particularly organized the session for young scholars to understand review process as well as academic career through authorship and editorship. Although ‘How to Review a Paper’ is usually thought to be an emerging topic for young scholars, it may also be a substantial debate for entire academic society.

The track records of papers with extraordinary impact (e.g. citations, creating a new research field) indicate that an innovative study may need long time to be recognized by the academic society. Among these studies, there are several papers published in non-refereed form (conference proceedings, working papers) at first, then invited for journal publication after several years. That is very common among the most cited papers in economics.

Scholars with change-making ideas find it difficult to convey their message to their colleagues. Each review is backed with a basis of reviewer’s standpoint evolved through the literature, the existing setting of the field, while an innovative paper probably undermines the basis. The conflict between conventional basis and the paradigm shift makes the review process even harder. I would like to discuss the problem with some

comments from previous publications and emphasize the ‘innovative’ role of reviews.

Scientific research is somewhat a profession, but it is more of a key element of scholars’ life. When scientific research turns to be a joyful activity in which you lost yourself, you may not find an alternative way of happiness. Many eminent scholars spend most of their time in their research lab or office. Performing a research is absolutely the major objective of scientific interest while presenting the research and its outcome is another unavoidable step. Publication among the ways of presenting research (e.g. conferences) would be an integral part of scientific world. The uniqueness of publication comes from its tangible and measurable features. It is very difficult to rate a scientific thought or innovation while it is easy to count citations from a particular paper. In the last decade, the number of scholarly journals has almost doubled with the open-access boom (thanks to the age of internet). Now all over the world, there is a huge research population who seeks for a publication slot especially in leading journals. Academic journals receive a large volume of submissions each year, and handling of these submissions (even just for rejection) is now very complicated, time-consuming and intellectual task load. Journal editors of our age play great role, and it would be impossible without a peer review procedure.


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skeptic & heterodox

The peer review mechanism and scientific journalism are broadly established in the last century. In contrast to common assumption about scientific evolution, the practice of editorial peer reviewing did not become general before World War II (Burnham, 1990). In addition to several benefits of peer review process (thought to be irrefutable mechanism of ‘scientific’ journalism), there are also handicaps which may threaten the future of science. The peer review process may suppress anti-thesis against mainstream perspectives.

Richard Horton (2000), editor of the British medical journal The Lancet, once said:

In another story, Richard Smith (2006) tells us an interesting experience:

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Dear Sir,We (Mr. Rosen and I) had sent you our manuscript for publication and had not authorized you to show it to specialists before it is printed. I see no reason to address the -in any case erroneous- comments of your anonymous expert. On the basis of this incident I prefer to publish the paper elsewhere. Respectfully.

The mistake, of course, is to have thought that peer review was any more than just a crude means of discovering the acceptability – not the validity – of a new finding. Editors and scientists alike insist on the pivotal importance of peer review. We portray peer review to the public as a quasi-sacred process that helps to make science our most objective truth teller. But we know that the system of peer review is biased, unjust, unaccountable, incomplete, easily fixed, often insulting, usually ignorant, occasionally foolish, and frequently wrong.

According to Kennefick (2005), only a single paper of Albert Einstein’s over 300 papers was subject to peer review (with co-author, Nathan Rosen), and the review report was negative. Then, Einstein replied to editor as follows:

I remember feeling the effect strongly when as a young editor I had to consider a paper submitted to the BMJ by Karl Popper. I was unimpressed and thought we should reject the paper. But we could not. The power of the name was too strong. So we published, and time has shown we were right to do so. The paper argued that we should pay much more attention to error in medicine…

(An error also attracts other scholars to criticize and cite the mentioned paper, the journal gains enormous volume of citations!)

There is a huge submission volume to academic journals with vast number of poor written papers. It is obvious that today’s scientific world is not same as a century ago. From this perspective, peer review process is essential for handling submissions. It is not only an intellectual problem, but it has also a slot allocation side since each journal has a capacity of publishing papers based on publisher’s financial perspective. Even when there is an abundance of capacity (e.g. electronic publishing), impact factor is another dimension of paper selection process. Therefore, quantity of papers does not imply quality of them. However, quantity of citations really matters, and these days, impact factor engineering through several ways is an emerging debate of scientific society. As Goodhart’s law indicates:

When a measure becomes a target, it ceases to be a good measure.

Apart from technical and/or financial aspects, editors need to pay attention to the potential of inhibiting thought provoking, change-making and innovative research based on its incoherency with the mainstream.


CHALLENGE

Okan DuruAssistant Professor,Department of Maritime AdministrationTexas A&M University at Galveston

Dr Okan Duru is an Assistant Professor of Maritime Finance and Logistics at Department of Maritime Administration, Texas A&M University at Galveston as well as Visiting Scholar at Kobe University. He received his PhD from Kobe University, Japan. His research interests are in shipping asset management, behavioral economics of shipping business, forecasting, judgment and decision making. He has published many journal papers and conference papers as well as editing journal issues. He reviewed several papers for Maritime Policy and Management, International Journal of Forecasting, Transportation Research Part E: Logistics and Transportation Review, Technological Forecasting and Social Change, European Journal of Operational Research, Journal of the Operational Research Society-JORS, Applied Soft Computing, Fuzzy Sets and Systems, International Journal of Fuzzy Systems, among others.

There are a few major perspectives almost in all scientific fields which usually define the mainstream. Once a mainstream perspective is established, scholars tend to follow it or take it as basis of further research. Having a fundamental starting point is very helpful especially for young scholars who usually lose their ways in the literature. On the other hand, the popularity of a perspective or philosophy maintains itself since reviewers are influenced by early scholars which causes self-perpetuating literature. When a young scholar criticizes his/her pioneers in the field, an extraordinary effort will be needed to overcome orthodoxy of thoughts. Ensuring fairness among papers published by a popular scientist and a heterodox or papers written with mathematical complexity and philosophical interpretation is not an easy task.

Most scholars may think that a review invitation validates the rationality or correctness of their academic perspective, and they may tend to review papers in terms of their own standards and intellectual standpoint. Intellectual accumulation and experience are helpful for reviewers’ role while they also need to respect and yield criticisms and heterodoxy in contrast to their existing viewpoint. We should bear in mind that innovative theories and discoveries are usually born with a heterodox approach.

ReferencesBurnham, J. C. (1990). The evolution of editorial peer review. Jama, 263(10), 1323-1329.Horton, R. (2000). Genetically modified food: con-sternation, confusion, and crack-up. MJA 172 (4): 148–9.Kennefick, D. (2005). Einstein versus the Physical Re-view. Physics Today 58(9), 43.Smith, R. (2006). Peer review: a flawed process at the heart of science and journals. Journal of the Royal Society of Medicine, 99(4), 178-182.

“ When a measure becomes a target, it ceases to be a good measure.

–Charles Albert Eric Goodhart

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comments & praises

Peter LorangeChairman, the Lorange Institute of Business

The Shipping Industry has been undergoing a period of severe difficulties, and these do not seem to be over! One way to ameliorate this is to undertake more research, relevant for the Industry. I see from major areas in which such research might take place, and anticipate reporting on this in The Maritime Economist:

• The classical shipping industry. This is one of the few remaining ones where perfect/atomistic competition still prevails. Relevant research here might focus on how to understand particular market cycles better (forecasting, behavioral analysis, political analysis …). And, why are appropriate decisions regarding “in/out” and/or “long/short” not taken as one might expect? (Behavioral factors, risk assessing, personal agendas …). More research is clearly needed.

• We see a growing trend towards “new shipping” – i.e. relatively less capital intensive firms, and with relatively more specific customer closeness. How can relevant customer insights be internalized? (i.e. avoiding the broker’s “filters!”). How can new financing be brought in on the ownership side? How can relevant innovations be implemented (say, such as the SAVER on Tripple A designs in container shipping), etc.

• How is the future successful shipping company organized? What are the competences to be needed in – home vs. outsourced? Do we see a split between owning, managing and operating? Are we seeing the emergence of a “flat”, “we, we, we” organizational culture, in contrast to the older hierarchical / silo / “me, me, me” culture?

• Innovations. Are we seeing new approaches not only to ship design (such as SAVER, Triple A), but also to propulsion, i.e. use of gas in engines? Are there shipbuilders becoming more prone to embrace innovations, rather than to focus on positive learning-curves effects from long/standard ship series to be built? “New” manufacturing; …

The above, and other innovations, are likely to provide benefits for shipping companies when it comes to their efforts to cope in the face of extremely difficult conditions.

THEMARITIME Economist has an important role to play!


IAME 2012 ConferenceTaipei, September 5–8 2012Professor Paul Tae-Woo Lee, Soochow University, Taiwan and Professor Zaili Yang, Liverpool John Moores University

Memories

The 2012 International Association of Maritime Economists Conference (IAME 2012, Taipei) which was held at Hotel Grand in Taipei on 5-8 September 2012, provided a unique global conference for academics, key industrial practitioners and policy makers from diverse backgrounds and interests to meet, discuss and debate critical and challenging issues under the theme of ‘Challenges in the shipping and port industry in the context of the global economy’.

The conference attracted 240 luminary delegates coming from 31 nations and six continents giving a truly comprehensive and international view on international shipping, ports and logistics envisaged opportunities and challenges in tandem with scientific, practical and contemporary perspectives, many of which have global impacts and implications. 156 full papers out of 340 abstracts and manuscripts submissions were presented after review and registration processes. Regarding the detailed information on paper subjects, authors’ nationali-ties and geographical distributions, see Appendix 2 and The Quarterly Newsletter of the International Association of Maritime Economists (September 2012, pp. 12-19).

The co-hosts and co-organizers of the conference were Professor and Director Paul Tae-Woo Lee at Shipping, Port, and Logistics Research Center of Kainan University in Taiwan, Professor and Director InKyo Cheong at Jungseok Research Institute of International Logistics and Trade of Inha University in Korea, and Professor and Chairman Chin-San Lu at Chinese Maritime Research Institute in Taiwan.

A brief of the conference programme and events are to be seen as follows. Successfully led by the conference chairman Professor Lee, the conference was kicked off through a Welcoming Reception Dinner on a river cruise ship on September 5. On the following day, Professor Lee made an opening speech and welcoming remarks were made by Vice President and Minister of Ministry of Transportation and Communications, R.O. China, respectively. Congratulatory remarks were addressed by President An-Pang Kao, Kainan University, Taiwan; President Gu-Wuck Bu, Youngsan University, Korea; and Professor Theo Notteboom, President of IAME. After that, an historical event was made; IAME hoisted an emblem flag (see the photo 1). Professor Paul Tae-Woo Lee, Conference Chairperson

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the story of IAME

donated the IAME Flag to President of IAME, Professor Notteboom and one desk cross-flag of IAME. After taking memorial group photo (see photo 2), the plenary session was filled by three key luminary speakers: Kevin Cullinane, Professor at Transport Research Institute, Edinburg Napier University, UK, Tom Leander, Asian Editor and Deputy Editor of Lloyd’s List, Hong Kong, and Choon-Sun Kim, CEO of Incheon Port Authority, Korea.

After lunch time, the five parallel sessions were arranged for the following days until September 7. In the meantime, special sessions for the shipping, port, shipbuilding and logistics sectors were organized to pave the way for academia to get field knowledge in collaboration with practitioners and governmental policy makers. One peculiar and innovative plenary session was launched for the first time at IAME Conference, which is “Meeting Editors” (chaired by Professor Kevin Cullinane and Professor YT Chang) aiming at two-ways dialogues between Editors in Chief/Associate Editors and the scholars. The representatives of the following journals Maritime Policy & Managment, Maritime Economics and Logistics, International Journal of Logistics and Management, International Journal of Shipping Transport and Logistics, Transport Reviews, Transportation Journal, and Omega joined the meeting. After the 2012 Taipei Conference, the event received well recognition and praise from the participants. A similar programme was also arranged in 2014 Norfolk Conference in USA.

In the first date of the conference, Professor Emeritus Dr Kuang Lin; Chairman, Pacific Star Group and Mr Choon-Sun Kim, CEO of Inchon Port Authority, Korea hosted Gala Dinner at Grand Hotel, Taipei. Professor Lin also chaired a special session on Shipping and Port Industry in collaboration with session co-chair Mr Tom Leander, Editor-in-Chief for Asia (ex-Editor-in-Chief in London) for Lloyd’s List.

At the Closing Ceremony on September 8, prizes and awards were announced, including Hanjin Prize (inception 1996), MPM Best Paper Prize and Best reviewer awards (see Appendix 1). Conference Organiser Prof. Lee hanned over the IAME Flag to 2013 Marseille Conference

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Memories

Organiser Conference Chairperson: Dr. Pierre Cariou. After the closing ceremony, a technical tour to Taipei Container Terminal and a Farewell Dinner at Fulon Hotel in Taipei were made for the participants.

Thanks to academic contributions of the all the participants, the conference organisers published two full special issues and one joint special issue and recommended best papers selected from the conference to Transportation Journal, Transport Reviews, International Journal of Logistics Management, and European Journal of Operational Research and Journal of Trade and Logistics.

• Ng, A.K.G., Lee, Paul T-W, Fu, X.W, and Suhtiwartnarueput, K. (2014), Special Issue on “Maritime Development and Economic Growth”, Maritime Policy & Management, 41(3).

• Lee, Paul Tae-Woo and Cheong, InKyo (2013), Special issue on “Clustering logistics with ports and shipping services in the time of troubled waters and free trade era”, Maritime Policy & Management, 40(2).

• Lee, Paul Tae-Woo, Liao, Chun-Hsiung and Lu, Chin-Shan (2013), Special Issue on “Towards dynamic capabilities in shipping operations”, International J. of Shipping and Transport Logistics, 5(6).

International Journals arranged for the 2012 IAME Taipei Conference were:- Special Issue of Maritime Policy & Management- Special Issue of International Journal of Shipping and Transport Logistics- Transportation Journal - Transport Reviews - European Journal of Operational Research - International Journal of Logistics Management - Journal of International Logistics and Trade

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the story of IAME

Appendix 1:

HANJIN PRIZEPaper title: “An Exploratory Study on the Effect of Trade Data Aggregation On International Freight Mode Choice” by Dong Yang, Ghim Ping Ong, Anthony Theng Heng Chin (National

(Nanyang Technological University, Singapore), Michael Dooms (University of Brussels, Belgium), Meifeng Luo (The Hong Kong Polytechnic University, Hong Kong), Walter Ka-Io Wong (National Chiao Tung University, Taiwan), Wen-Yao Grace Wang (Texas A&M University at Galveston, USA)

KAMI PRIZEPaper title: “Understanding Mode Choice Decisions: A Study of Australian Freight Shippers” by Mary R. Brooks (Dalhousie University, Canada), Sean M. Puckett (US Dept. of Transportation, Volpe National Transportation Systems Ctr.), David A. Hensher (University of Sydney) and Adrian Sammons (AMSTEC Design Pty Ltd)

OUTSTANDING ACHIEVEMENT AWARD AND SPECIAL APPRECIATION AWARDIAME President and Professor Theo Notteboom and Conference Chairman and Professor Paul Tae-Woo Lee awarded Outstanding Achievement Award to Mr. Choon-Sun Kim, CEO of Incheon Port Authority, Special Appreciation Award to Professor Emeritus Lin Kuang, Chairman of Pacific Star Group, and Dr Guwuck Bu, President of Youngsan University in Korea for their contribution to the 2012 IAME conference.

Professor Notteboom awarded Appreciation Award to the three organizers of IAME 2012 Taipei Conference, Conference Organiser and Conference Chairman Paul Tae-Woo Lee (Professor and Director of Shipping, Port and Logistics Research Centre, Kainan University, Taiwan), Conference Co-organiser and Professor Chin-Shan Lu (Chairman of Chinese Maritime Research Institute, Taiwan), Conference Co-organiser and Professor InKyo Cheong (Director of Jungseok Research Institute of International Trade and Logistics, Inha University, Korea) and Conference Secretary Dr Chen Tao (Head of Dept of Logistics and Shipping Management, Kainan University).

University of Singapore)

MPM BEST PAPER:Paper title: “Impact of Privatization on Port Efficiency and Effectiveness: Results From Panama and Us Ports” by Anthony M. Pagano (University of Illinois at Chicago, USA), Wen-Yao Grace Wang (Texas A&M University at Galveston, USA), Onésimo Sánchez (Panama Canal Authority, Panama), Ricardo Ungo (Panama Canal Authority, Panama)

MPM RUN-UP BEST PAPER:Paper title: “Modelling Port Choice in an Uncertain Environment” by Gi-Tae Yeo (University of Incheon, Korea), Adolf Koi Yu Ng (Hong Kong Polytechnic University, SAR), Paul Tae-Woo Lee (Kainan University, Taiwan), Zaili Yang (Liverpool John Moores University, UK)

BEST REVIEWER AWARD:Recognizing that conference paper review process is one of critical factors to improve the IAME Conference quality, the conference organizers of the IAME 2012 Taipei Conference have awarded the Best Reviewer Award to nine young scholars who made excellent review reports to enrich and improve the conference papers: Zaili Yang (Liverpool John Moores University, UK), Hwa-Joong Kim (Inha University, Korea), Masahiro Ishii (Sophia University, Japan), Kai-Chieh Hu (Soochow University, Taiwan), Jasmine Siu Lee Lam

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Memories

Appendix 2: Brief information of the Conference papers and the Authors

1. Accepted Full Papers: 156 out of 340 abstract and full papers after review and registration process- Total number of papers including special session and industry: 156 papers

- One-to-One Rule has been applied: One registrant can present only one paper

2. Total number of registered authors: 162

3. Participants by country: 31 countries

Figure 1. Presentation papers by topic (number of paper, composition ratio)

Table 1. Co-authors’ Nationality by Region and by Country

Asia -13 Europe -14 North America -3 South America -1 Oceania -1 Taiwan 49others 40Korea 34Hong Kong 15Japan 11Singapore 11Thailand 10Turkey 6UAE 1Sri Lanka 1India 1Vietnam 1Malaysia 1

181

UK 30Belgium 16Sweden 15Spain 10Italy 7Netherlands 7Greece 6France 5Norway 5Denmark 3Montenegro 3Portugal 3Germany 2Serbia 1 113

USA 8Panama 2Canada 1

11

Brazil 3

3 Total: 317 Authors for 155 Papers from total 32 Countries

Australia 9

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IAME 2007 Conference Athens, July 4–6 2007Dr Ilias Visvikis, Professor, Ship Finance and Risk Management, Director, Executive Education, World Maritime University, Malmö, Sweden

Memories

It all begun in 2005 at my previous academic institution, when ALBA Graduate Business School at the American College of Greece presented a proposal to the IAME council members during the IAME 2005 conference in Cyprus, to organise and host the 2007 conference in Athens, Greece (July 4-6 2007). Greece was selected on the basis of its key geo-economic location, as well as its status and significance within the international maritime sector. More than three months of work on the proposal paid off when I was informed soon afterwards that the proposal was accepted!

thereafter. Trust me, when I say, you need to be fully aware of what you are getting into in terms of work, preparations and personal involvement before you submit a proposal. I believe all other prior chairmen of the IAME conference would agree with me on that.

The first decisions were to put together a Local Organizing Committee that would work for all the conference administrative arrangements and an

Opening Ceremony – Ilias Visvikis, Chair

Then, it took me just a moment to realise that for the next two years my focus and attention would be on offering a great conference in my home country for all IAME members. I still vividly remember all the preparations and numerous meetings and talks that had to take place from the inception of the idea to organize the IAME conference, until the closing day of that successful event and a couple of weeks

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the story of IAME

academic International Steering Committee in order to peer-review the forthcoming abstracts and full papers. I am grateful for all the support I received from those two committees, as you really need a good team around you in order to take on this work load and responsibility. Next, there was the theme of the conference that needed to be selected; which finally was: “Challenges and Trends in Shipping: Markets, Investments, and Policies”. It was also decided to hold the Conference at two prestigious venues in the southern suburbs of Athens: The Eugenides Foundation and the Athens Metropolitan Hotel.

IAME 2007 took place under the auspices of the Ministry of Mercantile Marine and the Hellenic Chamber of Shipping, and was sponsored by NAVIOS Maritime Holdings Inc. that served as the IAME 2007 Industry Partner. MFS Maritime Financial Services Corporation, The Tsakos Group and Nereus Shipping S.A. were the event’s Silver Sponsors, while Diana Shiping Inc. and The Marshall Islands Registry were the Bronze Sponsors. Furthermore, it was supported by the following industry bodies and associations (in random order): BIMCO, INTERTANKO, Mediterranean Cargo Vessels Shipowners Union, Hellenic Shipbrokers Association, HELMEPA, The Propeller Club of the United States, the International Maritime Union in Greece, WISTA Helas, the Hellenic Logistics Association, and the Hellenic Association of Maritime Economists.

The IAME 2007 International and Domestic Communication Sponsors were Lloyd’s List and Naftemporiki Newspaper, respectively, whereas International and Domestic Communication Supporters were Lloyd’s Shipping Economist, Lloyd’s List Events, NAFTIKA CHRONIKA, Economic Outlook, ELNAVI, EFOPLISTIS, Shipping International Monthly Review, NAFS and Logistics & Management.

Then what came next was the issue of finding sponsors and supporters. The IAME 2007 conference received great support from both the Greek, as well as from the international, shipping community. Without their support, IAME 2007 wouldn’t have been such a unique experience for all the delegates that participated. I am very proud to see people coming to me at various IAME conferences and still talking about their experience back at IAME 2007 in Athens. I guess this is the true “reward” that you get from such an endeavor. 55

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Memories

The event’s Official Provider of Express Mail Services was DHL Express.

The conference finally attracted 230 abstracts from which 168 were accepted to proceed to the full paper stage. The abstracts submitted in total for consideration originated from 125 institutions. Out of those, 123 peer-reviewed papers were finally presented at the 36 sessions of the conference, and represented maritime academic institutions from 34 countries around the world and from 5 continents. In addition, senior Government officials and shipping executives were keynote speakers at the Conference, presenting their views and positions on the development and progress of the Greek and International shipping. The largest participation came from academic institutions in Europe (56.3%), followed by institutions from Asia (14.3%). The remaining participation came from North America (14.2%), Oceania (8.0%), US (5.4%) and Africa (1.8%).

The Best Paper Award was offered by Palgrave Macmillan, Maritime Economics and Logistics (MEL),

From the social side, the conference offered all attendees an organized visit to the Foundation of the Hellenic World, a state-of-the-art cultural institute that features one of the most active cultural centers in Athens, the Hellenic Cosmos. The official “Aegean Breeze” Gala Dinner took place at Asteras Seaside Tales located also in the southern suburbs of Athens, literally speaking by the seaside. I still remember when around 430 delegates and guests arrived at the venue, and many took off their shoes to walk on the white sand beach, looking a fabulous summer sunset over the blue Aegean sea.

while the Runner- Up Best Paper Award was offered by BIMCO. Those two papers together with eight more select papers from the conference were published in Maritime Economics and Logistics, Volume 10, Issue 1, March 2008.

In conclusion, and with this opportunity, I would like to thank the Editors of The Maritime Economist magazine for giving me the opportunity to bring back to mind all those great memories!!

Photos courtesy of Ilias Visvikis

Dancing at Gala Dinner

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comments & praises

Ulas DuraliDirector, Dry cargo Lorentzen & Stemoco

(Singapore)

I have always greeted new maritime publications with excitement since I believe our industry needs to have a stronger voice and a higher awareness level within. The arrival of the new Maritime Economist Magazine augmented such excitement with enthusiasm as well due to the prospects of having a much needed publication expertly researched and written with a clear, incisive analysis of matters related to commercial side of shipping and allows all readers of various backgrounds to apprehend the bigger picture in a way that is at times denied to non-economists. Moreover it has the greatest potential to serve as a platform where scholars may benefit by seeing different viewpoints of the industry professionals, and vice versa, thus reducing the gaps between their perceptions of the facts. These are important gaps that we need to bridge for a sustainable future.

Maritime Economics is by definition a multidisciplinary field. Commercial Shipping, in turn, is one of the most multifaceted and multinational businesses anyone has ever come across. Our industry is undeniably going through arduous times, especially on the Dry bulk side. The Baltic Dry Index (BDI) has reached the historic low of 509 on 18 February 2015, and our plight might have been caused, in part, by the above mentioned gap. Converting academic works, research and analysis into clear depictions with concise explanations will surely be of great value and I believe the Maritime Economist Magazine will be successfully carrying out this vitally important task for our industry.

“Converting academic works, research and analysis into clear de-pictions with concise explanations will surely be of great value,

and I believe THEMARITIME Economist will be successfully carrying out this vitally important task for our industry.

Book Review

Creating Global Opportunities:Maersk Line in Containerisation 1973–2013

By Chris Jepson and Henning Morgen

The recently published book ‘Creating Global Opportunities: Maersk Line in Containerisation 1973-2013’ written by two well-experienced Maersk employees is a very pleasant discovery that is likely to intrigue both academics and business people. With an extensive amount of information, company documents and published materials the authors tell the story of one of the leading liner shipping companies from its origin, to the development of its containerized trades, through its growth up to 2013.

Although the book is dedicated to Maersk Line, the reader will gain a broad picture of the shipping interests of the Maersk group. But reviewing the history of one of the market leaders in container transport offers also an opportunity to look back at the recent history of the container shipping industry. The focus of the book is not only presenting the development of the company but explaining, often critically, the strategic and operational choices that top management made and tell a success story where charismatic leadership, vision and good entrepreneurial spirit brought Maersk line to its leading global position.

One of the merit of the authors is to be able to explain clearly the market challenges faced by the firm, on how for example the decision to develop containerized trades was made in 1975—relatively late with respect to other competitors at the time. Particularly interesting chapters are those describing how the firm built its presence in container shipping after 1976 (chapter 4), what lead to the decision to enter the container terminal sector in the early 1990s (chapter 7) and the challenges imposed by acquisitions (chapter 8-9).

The books presents a wide array of materials from the Maersk archives, including pictures and quotes from key Maersk people. Each chapter also includes a summary of key trade and economics statistics provided by the Economist Intelligence Unit and short boxes that focus on some key innovations, business deci-sions or other salient developments in the history and strategy of the company.

The book is interesting not only for maritime historians and shipping aficionados but for anyone with a genuine interest in understanding how business decisions are carried out in shipping companies and what it takes to become the largest container ocean carrier.

Michele Acciaro, Ph.D.

Creating Global Opportunities:Maersk Line in Containerisation 1973–2013By Chris Jephson and Henning MorgenPublished: August 2014ISBN: 9781107037816,Cambridge University Press.58

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CHARITY

The OSCAR CampaignThe Ocean and Shipping Community Advancing Children’s Health and Research

When your child gets sick the world stops spinning, yet spins faster than ever at the same time. This is what happened to Phil and Yvonne Parry 12 years ago when their son, Oscar, fell ill with leukaemia. Oscar was only three and the next five years were filled with hope, despair, harsh treatments and hospitalisation. Thanks to his Bone Marrow Transplant team trying new treatments in collaboration with doctors in Holland, France and the U.S, today he is now an energetic teenager. To show his gratitude and help Great Ormond Street Hospital to help more children Phil Parry launched the OSCAR Campaign.

Named after his son, the OSCAR Campaign is a fundraising partnership uniting the shipping industry to raise research funds for Great Ormond Street Hospital in London and its partner, the UCL Institute of Child Health. The Campaign Board is filled with shipping executives and Phil Parry is Chairman of the Campaign as well as Chairman of leading shipping recruitment company and HR consultants Spinnaker Global Ltd.

“Having spent the last 20 years working in shipping, this is a brilliant opportunity for those of us in the international shipping community to come together in support of a cause that, although not directly related to our industry, could affect any one of us”, explains Phil.

Against the odds

For a number of years Oscar was undergoing treatment for acute leukaemia at Great Ormond Street Hospital, only then to contract JMML, an even

more severe form of the disease. “Watching Oscar get better only to see him contract a second cancer and then relapse over and over again was very hard for us. On 14th January 2007 we were told that he would not survive the day. However, thanks to new treatments pioneered by his team at Great Ormond Street Hospital he is now completely cured and his case is now used to treat other patients. To witness first-hand the unbelievable dedication and support from the doctors, nurses and support staff who were simply unwilling to give up on him was humbling”, says Phil.

Help OSCAR to help more seriously ill children

During the years when he and his wife almost lived at Great Ormond Street Hospital, the idea of doing something to give back to the team and hospital that

Phil Parry of Spinnaker Global (pictured left) is Chairman of the OSCAR Campaign seen here at the OSCAR Dragon Boat event with his 15 year old son Oscar (centre) and Olympic gold medallist, the rower Helen Glover who presented the medals to the top three.

Shipping industry unites for OSCAR

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helped him get his son back, took root. This led Phil to initiate a shipping industry campaign in 2011. Phase 1 of the campaign raised £500,000 towards funding a new Seas & Oceans themed floor in the new hospital building. Phase 2 started in January 2013 with the aim of raising £1million to fund critical research into childhood cancers and immune diseases.

“What’s great about the research we are raising funds for is that it can help make a real difference to children’s lives, as my family knows only too well. If Oscar had been treated two years earlier he would not be alive today. He benefitted from receiving treatment that was in an early stage of development and has since been used to save other children’s lives.”

The campaign has certainly built up strong support from the shipping community. On 16th September last year the industry came together to take part in the eagerly anticipated first OSCAR Dragon Boat Race. 250 participants enjoyed the event in the Docklands sunshine in London, with teams including AET, Augustea Shipping, A.M.Nomikos, Spinnaker, ICAP, JLT, Clarksons, Ince & Co, HFW and R.S.Platou taking to the water in spectacular colourful Chinese dragon boats to raise just over £120,000.

CHARITY

Phil said “I was absolutely delighted with the response from the shipping industry. It shaped up to be a really fantastic day and will hopefully turn into an annual event in the industry’s calendar.”

Phil explains: “the shipping industry – owners, brokers, insurers, lawyers and commodity groups - has been very willing to commit both time and money; we have already raised just over 50% of what we need in stage two from major contributions, fundraising challenges and events but there is still room for more support”.

If you would like to help the campaign hit its £1 million target please visit the website www.gosh.org/oscar

E-mail: [email protected] or call the team on:



In July 2013 the Malaysia Institute for Supply Chain Innovation (MISI) successfully bid in Marseille, France to host the prestigious 2015 International Association of Maritime Economists Conference.

The IAME 2015 conference theme of “Maritime 2025: The role of Maritime Clusters and Innovation in shaping future Global Trade” is part of a current research initiative launched at MISI aiming at understanding the future trends and practices in the different sectors of the maritime industry.

The conference will be held in the state of the art facility at the Central Bank of Malaysia in central Kuala Lumpur (KL). It is a superb venue with a multitude of break out rooms, and other facilities such as a restaurant, cafeteria, museum and art gallery.

IAME 2015 conference

“Maritime 2025:The role of Maritime Clusters

and Innovationin shaping future Global Trade

www.IAME2015.org

The 2015 IAME conference is taking shape and will be held for the first time in Malaysia and South East Asia between 24th & 26th August - Kuala Lumpur.

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This year there is a prize category for “Student Researcher Award” sponsored by STT – University of the Aegean, “The Best Conference Paper Award” sponsored by Palgrave-Macmillan and “The most Innovative Idea Award” sponsored by MISI, with prizes of 1,000 Euro, 250 GBP and 1,000 USD respectively.

We have now opened registration on the website and the initial signs are very reassuring. We have received 260 abstract submissions and our reviewers (two for each paper) are working very hard to validate those eligible for the conference. We plan to make the 2015 conference a high standard and very memorable event, the conference aims to ensure the most powerful line up of marine and educational speakers under one roof. The conference will be a great place to network with like-minded colleagues who want to expand their knowledge and connections in their field of expertise. This is the first time that the conference has ever been held in Malaysia, which is a truly amazing country that is just waiting to give a true Malaysian welcome to our participants, so I look forward to meeting everyone between 24th & 26th August 2015, here in Kuala Lumpur.

Conference Organizers

The conference will be organized and hosted by the MIT Global SCALE network member located in Malaysia, the Malaysia Institute for Supply Chain Innovation.

Malaysia Institute for Supply Chain Innovation (MISI) is a collaboration between the MIT Center for Transportation and Logistics (MIT CTL) and the Government of Malaysia. MISI is an independent degree-granting institute that focus’s on supply chain management. It is the newest member of the MIT Global Supply Chain And Logistics Excellence (SCALE) network that spans four continents, with plans to expand into other regions of the world. Currently, the SCALE network has four locations that include MIT CTL, USA; ZLC, Spain, CLI, Colombia and MISI, Malaysia.

Kuala Lumpur Attractions

There is plenty to see and do in Kuala Lumpur, with a high concentration of shopping malls entertainment spots and eateries. Shopaholic will not be disappointed as they can walk the streets or branch out into any of the five huge shopping malls in the city center alone. Malaysia is a food paradise, and there are more than 15,000 eateries located in every niche and crevice of the cities golden triangle, each restaurant having its own history and taste. For those who enjoy adventure, there are countless tourist attractions within the KL area such as: China Town, Merdeka Square, Lake Gardens, The Butterfly Park, The Bird Park, The Batu Caves, Sunway Lagoon, Little India, The National Museum, The National Mosque, The Giant Pandas at the National Zoo, Central Market for your souvenirs and not forget the famous Petronas Twin Towers.


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Dr. Ioannis N. LagoudisIAME 2015 International Scientific Steering CommitteeDirector of Applied ResearchMalaysia Institute for Supply Chain Innovation


Conference Organisers

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Editorial Board

President of IAME Jan Hoffmann Editor-in-Chief Okan Duru Associate Editor Adolf K.Y. Ng

INPLAINVenus Lun, Section Editor

Dr Venus Lun is Associated Head and Assistant Professor of the Department of Logistics and Maritime Studies at The Hong Kong Polytechnic University (PolyU). She is also Director of Shipping Research Centre of PolyU. She holds the visiting positions of Erasmus Mundus Scholar, City University London (UK); Visiting Fellow, Curtin University (Australia); Visiting Scientist, Nanyang Technological University (Singapore); and Visiting Scholar, Chung-Ang University (Korea). She is currently Editor-in-Chief of International Journal of Shipping and Transport Logistics. She is also Guest Editor of the following scholarly journals: Accident Analysis & Presentation, International Journal of Production Economics, Research in Transportation

Economics, Transportation Research: Part D, and Transportation Research: Part E.

Adolf K.Y. Ng is a Professor of Transportation and Supply Chain Management at the Asper School of Business of the University of Manitoba, Canada. He received DPhil in geography from University of Oxford (St. Antony’s College), UK, and his excels in the research and teaching of port management, transport geography, climate change and transport infrastructure planning, port-focal logistics and global supply chains. He is a productive researcher which includes the publication of two scholarly books and more than 40 journal papers, and has received numerous fellowships and academic awards. He is a Council Member of the International Association of Maritime Economists (IAME), Co-Editor of Journal

of Transport Literature, Associate Editor of The Maritime Economist, and an editorial board member of several reputable maritime and transportation journals.

Dr Lorena Garcia-Alonso is Professor at the Department of Applied Economics of the University of Oviedo (Spain). She received her PhD in Applied Economics from the University of Oviedo (2005), with the subject: Inter-port Competition in Spain. Since then I have presented numerous papers related to this topic in international conferences, and I have also published several papers in international journals, such as Maritime Economics and Logistics, Maritime Policy and Management, Transport Reviews, Transportation Journal or International Journal of Shipping and Transport Logistics. She is Member of the International Association of Maritime Economics (IAME), Regional Science Association International (RSAI),

European Regional Science Association (ERSA), Spanish Association of Regional Science (AECR) and Economics Free Association (ALDE), founding partner of the journal Regional Studies and founding member of the researching group Regional Economic Analysis Laboratory (REGIOlab).

Dr Joan P. Mileski is a tenured Professor in Maritime Administration and of Marine Science and the Head of the Maritime Administration Department at Texas A & M University at Galveston (TAMUG). She holds a PhD in International Management Studies from the University of Texas at Dallas, a M.S. in Taxation from Pace University and B.B.A in Accounting from the University of Notre Dame. She has vast hotel industry experience with Hyatt and Westin Hotels as the Director of Taxation and transportation experience with Union Tank Car Corporation. She has also been a Certified Public Accountant for 34 years. She has been awarded several grants including from the U.S. and Texas Department of Transportation, has teaching

and international research awards, and publishes in Marine Policy, Maritime Policy and Management, The International Journal of Public Administration, and Corporate Governance: The International Journal of Business in Society and presents with the International Association of Maritime Economists, Academy of International Business, the Academy of Management, and the Strategic Management Society. Her research activities currently include the impact of national and supranational (EU, NAFTA) regulation change on the Maritime Industry firms’ competitive strategy including maritime security regulations and on the importance of transportation infrastructure on investment flow into a location. She is a Fulbright research scholar alumnae, an annual visiting Professor at the World Maritime University and the immediate past President of the Women in the Academy of International Business.

Adolf K.Y. Ng, Section Associate Editor

Lorena Garcia Alonso, Section Associate Editor

Joan P. Mileski, Section Associate Editor

Editorial Board 2015–2016

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Dr Pierre Cariou is Full Professor at Kedge Business School in Bordeaux, France. He is visiting professor at the Shanghai Maritime University and at the World Maritime University in Malmö, Sweden. Prior to this, he held the French Chair in Maritime Affairs at the World Maritime University. From 2001 to 2004, he was Associate Professor in Economics at the Faculty of Economics of Nantes (France). He completed his PhD in 2000 on liner shipping strategies and has since then contributed to several reports for private companies (Natixis Bank, Casino Group), the French Parliament (Commissariat General du Plan), and for the Port Authority of Nantes and Marseille. His main research interests are shipping/port

economics and maritime safety. He is since 2014, Vice President of the International Association of Maritime Economists (IAME).

Dr Thomas Vitsounis is the project leader of “Total Port Logistics” at National ICT Australia (NICTA) since July 2013. From August 2011 until April 2012, he acted as an advisor of the Secretary General for Ports and Ports Policy, Ministry of Competitiveness, Development and Shipping, Greece. Thomas had a key role in the “Port Performance Indicators: Selection and Measurement – PPRISM” project, undertaken by the European Seaports Organization (ESPO), the European Commission (EC) and researchers from several European Universities (2010-2011). From 2012 until 2013, Thomas has been a regular contributor to the EC (DG Mare). Thomas has been a PENED Research Fellow at the Department of

Shipping, Trade and Transport (STT), School of Business, University of the Aegean, and completed his PhD entitled “Balanced Port Performance Analysis: Port Users and Service providers Interactions, Generation of Relationships, and Measurement of Perceived Value” in 2011. He has also been a Research Fellow (Jean Monnet in European Port Policy) at the same Department (2010-2011) and contributed (2006-2011) as a Teaching Assistant in the following courses: Maritime Economics, International Maritime Policy, Port Planning & Policy, Port Management and European Port Policy. Thomas has a track record of more than 30 research papers published in various academic journals, books and presented in international conferences, and 10 port and shipping related projects. He is a founding member of Porteconomics.eu, a web-based initiative advancing knowledge exchange on port economics, management & policies.

Adrian Beharry, BSc Economics and MSc General Maritime Administration, studied at the World Maritime University, Malmo, Sweden where he interned at the US MARAD and the World Bank. He has worked at the Port Authority of Trinidad and Tobago where he served in management positions in Port Operations, Property Management and Cruise Shipping and Waterfront Development Planning. He has worked in the Energy Shore Base and Yachting Ship Repair Industries. He served as a Sector Specialist Sea at the Ministry of Works and Transport where he worked on the Water Taxi Fast Ferry Service, the Port of Spain International Port Relocation Project and the Regional Fast Ferry Service in the Southern Caribbean. He is a

specialist in the field of maritime economics, port master planning, operations management and fast ferry services. He is a member of the IAME. He is currently a senior lecturer at the Maritime Campus of the University of Trinidad and Tobago.

Dr Assunta Di Vaio (Ph.D.) is Associate Professor in Business Administration at the University of Naples “Parthenope” (Italy). She teaches Business Administration, Financial statements and Accounting Principles, Budgeting and Control, Organization of the Seaport Systems. From December, 2013 she has been qualified as Associate Professor of Business Administration. The study of business risks and the analysis of the cost accounting in the public-private partnerships and in the maritime network are the main topics of interest. From January, 2014, Assunta Di Vaio is the scientific director of the project “Public-private partnerships in the cruise sector: A governance model to the development of the Campania Regional System”. This project

has been funded by Campania Region. She is a member of editorial boards of some international journals as Science Journal of Business and Management (SJBM) and Journal of Human Resource Management (JHRM) - Science Publishing Group.

Larissa van der Lugt is at the School of Economics, Erasmus University Rotterdam as researcher / project coordinator working in research projects on port and maritime economics, port management and port related logistics development. In this work academic knowledge is developed and applied to practical problem analyses and policy issues. Larissa is also experienced in the development of and teaching in academic education programs, both regular as executive education: she is the academic program director for the Master Maritime Economics and Logistics. In her actual functions Larissa is driven by the ambition to support the economic development of ports and ports’ actors, by developing in cooperation with other

researchers and industry professionals, grounded insights and new thoughts on economic and strategic improvements. And she is also driven by the ambition to educate academic students at a high level and to develop their commitment to the ports’ and logistics sector.

Editorial Board

Pierre Cariou, Section Editor

Thomas Vitsounis, Section Associate Editor

Adrian Beharry, Section Associate Editor

Assunta Di Vaio, Section Associate Editor

Larissa van der Lugt, Section Associate Editor

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FreshMINDS

Dr Alessio Tei, Ph.D. on Logistics, Transport, and Territory at the Italian Centre of Excellence for Integrated Logistics, Genoa. Currently he’s working at the Department of Economics of the University of Genoa as Post-Doc researcher. During his PhD he was a visiting researcher at the Department of Transport and Regional Economics of University of Antwerp. His scientific research is mainly focused on transport economics and on the effects of transport on environment. During the PhD he was enrolled in some consultancy works on port efficiency and on transport planning. He is author of several contributions published in academic journals and books, and he is also a reviews for both national and international journals, such as

Maritime Policy & Management, International Journal of Transport Economics and Research in Transportation Business and Management. He is a member of the International Association of Maritime Economists (IAME) and of the World Conference on Transport Research Society (WCTRs). He’s been involved as a member of the local organizing committee of the IAME 2013 Conference. He’s currently working on two main research fields about the impact of concession policy on port efficiency and the impact of transport infrastructure on the local development.

Dr Emrah Bulut is an Assistant Professor at Department of Business Administration of Yıldız Technical University and received his PhD. from Kobe University, Japan. His research interests are in Shipping Business Management and Economics, and he also study on the field of Behavioral Decision Making. He contributes several studies related to the market entry-exit time on shipping, shipping investment strategy decision and ship valuation. He proposes and improves some methods for the decision support systems, group decision making under uncertainty, and fuzzy time series forecasting. He has published several journal and conference papers. He has memberships of the American Finance Association (AFA), International

Association of Maritime Economics (IAME) and Korean Association of Shipping and Logistics (KASL). He also reviews papers for, Transport Policy (JTRP), Asian Journal of Shipping & Logistics (AJSL), European Journal of Operational Research (EJOR), and Fuzzy sets and systems (FSS), Transport Research Part D.

Dr Evangelia (Vicky) Kaselimi is a port economist at the Hellenic Ministry of Shipping and Aegean. For almost a decade, she has been working in the General Secretariat of Ports, Port Policy & Maritime Investments responsible for the supervision and the coordination of Greek Port Authorities on economic, organizational and administrative issues. She obtained her Ph.D. in 2013 from the applied economics department, Antwerp University. The project was funded via scholarship from the Hellenic State Scholarships Foundation (IKY). Since June 2014, Vicky has become a supervisor at the unit of internal audit, an independent consulting activity directly referred to the Minister of Shipping and Aegean. Her scientific interests

concentrate on port economics and policy. Part of her research has been published in international scientific journals and has been presented in numerous international scientific conferences. She is a founding member of PortEconomics.eu.

Editorial Board

CHALLENGE

Alessio Tei, Section Editor

Emrah Bulut, Section Associate Editor

Vicky Kaselimi, Section Associate Editor

Dr Jasmine Siu Lee LAM is currently an Assistant Professor and Director of MSc Maritime Studies Programme at Nanyang Technological University in Singapore. Dr Lam’s major research and teaching areas are maritime studies, logistics, supply chain management, and transport economics. Dr Lam has extensive experience in executive training and has been invited by various organizations such as Organization for Economic Cooperation and Development, NOL, port authorities and banks as a speaker at international conferences and seminars. Leading a R&D team and working closely with the industry and government agencies, Dr Lam has completed over 38 projects and has widely published in leading international journals.

She is the Associate Editor of Maritime Policy & Management (a flagship journal of maritime research) and a member of the editorial board of Journal of Supply Chain Management (among the top international journal in management). She is an Elected Council Member of the International Association of Maritime Economists, and also a member of BNP Paribas Chair international scientific committee. Dr Lam is the recipient of many awards, including Best Paper Awards and Erasmus Mundus Scholars Award awarded by the European Commission.

Jasmine Siu Lee Lam, Section Editor

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Dr Okan Duru is an Assistant Professor of Maritime Finance and Logistics at Department of Maritime Administration, Texas A&M University at Galveston as well as Visiting Scholar at Kobe University. He received his PhD from Kobe University, Japan. His research interests are in shipping asset management, behavioral economics of shipping business, forecasting, judgment and decision making. He has published many journal papers and conference papers as well as editing journal issues. He reviewed several papers for Maritime Policy and Management, International Journal of Forecasting, Transportation Research Part E: Logistics and Transportation Review, Technological Forecasting and Social Change, European Journal of Operational

Research, Journal of the Operational Research Society-JORS, Applied Soft Computing, Fuzzy Sets and Systems, International Journal of Fuzzy Systems, among others.

Dr Rosa Guadalupe González Ramírez is a professor and researcher at the Industrial Engineering School of the Pontificia Universidad Catolica de Valparaiso, Chile. She holds a bachelor degree in Industrial Engineering from the Technologic Institute of Morelia, a Master in Industrial Engineering from Arizona State University, a Master in Quality and Productivity Systems and a PhD in Engineering Sciences from Monterrey Tech (Mexico). She is currently part of the National Research System in Mexico. Her research areas are related to supply chain management and port logistics, including optimization models and algorithms, as well as trade facilitation, competitiveness studies and sustainability issues including social corporate

responsibility and port-city relationships. Other research areas include supply chain network design, districting and territory design, lot sizing, metaheuristics and mathematical programming. She has been working in the previous 5 years in applied research projects with several grants from the Chilean government.

Okan Duru, Section Associate Editor

Editorial Board

Rosa Guadalupe González Ramírez, Section Associate Editor

Memories

Professor Paul Tae-Woo Lee holds PhD from Cardiff University in UK. He is currently Fulltime Invited Professor, Department of Business Administration and Director of Sustainable Business Research Lab at Soochow University, Taipei. Paul was Visiting Professor at, among others, the Faculty of Economics and Politics in Cambridge, University of Plymouth, Dalian Maritime University, The Hong Kong Polytechnic University, and Chulalongkorn University including MPA Visiting Professor. He was a founding member of Asian Logistics Round Table (2007) and served IAME as council member, Secretary and co-opt vice-president. He was also guest editor or co-guest editor of MPM, IJSTL, and International Journal of Logistics:

Research and Applications, and Growth and Change. He contributed to Lloyd’s List for 1997-2001 as a monthly columnist. Professor Lee, as advisor or committee member or consultant, participated in developing and setting up shipping, port and logistics polices and strategies for several countries. He addressed keynote speeches at APEC, AANZFTA and UNDP workshops, and international conferences.

Dr Zaili Yang is Professor of Maritime Transport at Liverpool John Moores University (LJMU), UK. Prior to his current appointment, he was Reader in Maritime Transport (2010-2014) and a lecturer in Maritime Operations (2007-2010) at the School of Engineering, Technology and Maritime Operations, LJMU. He received his BEng in Maritime Transportation from Dalian Maritime University, China, in 2001, MSc in International Transport from Cardiff University, UK, in 2003, and PhD in Maritime Safety from LJMU, UK, in 2006. Dr Yang’s research interests are system safety, security and risk based decision making modelling, especially their applications in marine and supply chain systems. Dr Yang has received more than £1.5m

external grants (£1m as the PI) from the EU, UK EPSRC and UK DTI to support his research. Research funding support has also been received from government collaborators (i.e. UK MoD and Korean research collaborative funds) via PhD research projects. Dr Yang has successfully completed 4 postdoctoral and 11 PhD projects. He currently has 11 PhD students under his supervision in the research areas of maritime safety, logistics operation and port optimisation. His research findings have been published in more than 100 technical papers in risk and supply chain areas, including 50 refereed journal papers. Dr Yang is a member of editorial boards of seven international journals such as JMM and AJSL. He has also served as a member of review boards for national research councils of some EU countries such as Norway and Romania. and international conferences.

Paul T.W. Lee, Section Editor

Zaili Yang, Section Associate Editor

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Editorial Board

Mariikka Servanto is a communications and marketing communications professional. She joined the Centre for Maritime Studies of the University of Turku in 2008. She is responsible for external communication, web & digital marketing, brochures and other advertising material. Her professional experience includes working as an information officer in the Fair and Congress Centre of Turku, where she was responsible of PR and media relations. Mariikka has a master’s degree in economics from the University of Turku. She has also studied graphic design in the Arts academy of the Turku university of applied sciences, and intercultural corporate communication studies in the University of Jyväskylä.

SOCIETY NEWS

Dr Michele Acciaro is Assistant Professor of Maritime Logistics at the Kuehne Logistics University (KLU). Until December 2012 he held the position of Senior Researcher – Green Shipping at the R&I department of DNV-GL near Oslo. Between 2004 and 2010 he worked as deputy director and researcher at MEL/Erasmus SmartPort of Erasmus University Rotterdam, with which he is still associated. Dr. Acciaro holds a BSc and a MSc (cum Laude) in Statistics and Economics from the University of Rome “La Sapienza”; a MSc in Maritime Economics and Logistics, for which he was awarded the NOL/APL Prize for Student Excellence, and a PhD in Logistics from Erasmus University Rotterdam. Dr. Acciaro was awarded the Young

Researcher Best Paper Prize at the IAME Annual Conference in Cyprus in 2005. Since 2013 he contributed to the European Sustainable Shipping Forum, and he is Council member of IAME, for which he edits the Association’s Newsletter. Dr. Acciaro research interests include liner shipping economics, terminal management and operations optimization, green shipping, container logistics integration and supply chain pricing and finance. He lectured at several institutions around the world, he authored over thirty publications and has been invited speaker at industry events such as TOC Europe and Intermodal.

Michele Acciaro, Section Editor

Dr Indika Sigera is a senior lecturer attached to the Department of Transport and Logistics Management, University of Moratuwa, Sri Lanka since 2006. During 1998 to 2006 Indika worked as a tanker charterer attached to State Oil Corporation. Indika graduated with a Master’s degree from World Maritime University in Malmo, Sweden in 2002. He completed his PhD in 2012 at Australian Maritime College, Australia. At present, Indika lectures Shipping, Port Management, International Trade and Research Methodology related subjects in several local and international universities. Indika’s major research interests are on strategic management stream. His recent research work focused on studying strategic

co-operations from Resource Based View (RBV), customer relationship management, corporate communications, applying employer and industry of choice strategies to the maritime industry and analysis on container terminal performance. Since 2006 Indika has been a council member of CILTSL. In addition he chairs its Education/accreditation committee.

Indika Sigera, Section Associate Editor

Verena Flitsch, IAME Newsletter Co-Editor

BOOK REVIEWS

Michele Acciaro, IAME Newsletter Editor

Indika Sigera, Section Associate Editor

PR & MEDIA DIRECTORVicky KaselimiSee FreshMIND’s section Editors

ART & DESIGN DIRECTORMariikka Servanto

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The Maritime Economist (henceforth ME Mag) is a magazine edited by the International Association of Maritime Economists. The aim of ME Mag is to combine both theoretical and practical knowledge and promote collaborations among scholars and professionals in the maritime industry. ME Mag is interested in the following topics with maritime focus:• Economics of maritime transportation (theory,

models, practical controversies, etc.);• Port governance, port competition, port

utilization and other port related issues;• Finance, asset management and investments;• Management and leadership in the shipping

business;• Operations research, optimization and industrial

engineering for maritime problems;• Maritime policy and governance;• Maritime business strategy;• Maritime geography and spatial analysis;• Behavioral science and human factor;• Marketing;• Cruise and ferry industries;• Short sea shipping;• Environmental issues and sustainability;• Risk management;• Intermodal transport;• Other related topics.ME Mag has a particular focus on Maritime Economics and Business while covering many related fields.

ME Mag has five fundamental functions:1. Encouraging scholars to present their research

in plain language for wider audiences of the maritime industry;

2. Promoting and encouraging R&D partnerships with non-academic institutions (firms, governmental offices, among others) of the maritime industry;

3. Encouraging young scholars to conduct research in maritime topics;

4. Encouraging provocative and critical research;5. Support collaboration among academia and

professionals.

Authors should keep in mind that, ME Mag is NOT only published for scholars, but it is also circulated to large society of the maritime industry and policy makers. Readers of ME Mag may not have a background on the presented topic, and authors are responsible for presenting the content of their article in a language that is clear to business and policy makers. ME Mag does not publish articles with many mathematical functions, long theoretical discussions and/or lack of practical value. Authors should always consider the perspective of professionals, business practitioners and policy makers and any other people who have general knowledge of maritime while have limited knowledge on the intended specific topic. ME Mag encourages narrative style, story-telling, metaphorical expressions and other methods of non-fiction authorship. On the other hand, each article should ensure at least one of the following di-mensions:• Presenting a new topic, method, theory,

perspective or model;• Presenting an existing academic research (already

published in a scholarly-refereed journal);• Analyzing data, models, systems or a market with

novel interpretations;• Criticizing an existing approach, system or thought;• Challenging the conventional wisdom on a

particular topic of maritime;• Presenting a knowledge created in the business/

industry practice;• Introducing an innovative solution to a common

problem;• Presenting a policy or strategy;• Sharing information about available data and tools

of interest to maritime professionals.

Four major sections are established to perform some of functions of ME Mag, and each has its own concept. Authors should first review the concept of sections below and define which section fits for their (proposed) article.


Contribute to The Maritime Economist

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Note: Authors who are not sure about the selection of proper section may send an e-mail to either a section editor which is thought to be closer to the topic and purpose of article or Editor-in-Chief for consultation.

Section Specif ic Notes

Section 1: INPLAIN

InPlain section is dedicated to academic research performed by both scholars and professionals in the maritime economics and business research. Scholars can briefly present a research which will be published shortly in an academic journal or an already published one. In such case, author should refrain using same text and should rewrite in ME Mag’s concept of easy-to-read and concise style. Therefore, it should be a kind of executive summary of the upcoming/published academic paper.

Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions.Technical requirements on articles for submitting to this section are as follows:• Article should not exceed 2000 words plus a

number of figures or tables;• A bionote of 80 to maximum 100 words length

should be inserted at the end of the article.Each article submitted to InPlain will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by the section editors.

A proposal for consideration can be sent to editors instead of full article. Proposals should address briefly the objective, motivation and background, main idea and major results.

Please submit your full article or a proposal electronically to [email protected]

Section 2: PROFESSION & PRACTICE

Profession and Practice section is dedicated to industry professionals for presenting innovative solutions, created knowledge and R&D results in the practice. Authors should refrain from telling success stories and focus on the drivers and requirements for successful results. This section promotes research activities at non-academic institutions and encourages to present research achievements as well as core concepts and created knowledge. Authors should present some evidences for supporting arguments.

Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions.

Technical requirements on articles for submitting to this section are as follows:• Article should not exceed 2000 words plus a


should be inserted at the end of the article;• Author’s affiliation (e.g. name of company) will

normally be indicated in bionote. However, using brand names and/or company logo in the arti-cle may cause an advertisement conflict. In such case, author will be contacted about using these components by sales office if the article is accepted for publication.

Each article submitted to Profession & Practice will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors.




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Section 3: FRESHMINDS

FreshMINDS section is dedicated to young scholars and professionals (early in their [research] career) for presenting their research results, novel concepts and innovative findings or thoughts. This section promotes young scholars and professionals to express their opinions and/or criticism about the conventional concepts with proper theoretical and/or practical evidences to support their arguments.

Articles in this section should be written in plain language excluding jargons and using limited number of technical terms with brief and simple descriptions.



should be inserted at the end of the article;Each article submitted to FreshMINDS will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors.



Section 4: CHALLENGE

CHALLENGE section is dedicated to draw attention to critical problems in the maritime industry as well as academic research. Both scholars and professionals can submit a short article dealing with the problem and draw attention of readers to that challenging topic.Articles in this section should be written in plain

language excluding jargons and using limited number of technical terms with brief and simple descriptions.



should be inserted at the end of the article;Each article submitted to CHALLENGE will be reviewed in terms of its intellectual value, writing style and accordance with the policy and concept of ME Mag by section editors.



BOOK REVIEWS

ME Mag will review recently published books and article collections related broadly to maritime transport, maritime economics, ports, logistics and shipping that can appeal not only to an academic audience but also to industry.

If you would like a book to be considered for review in the magazine, please send two copies to:Michele Acciaro, Grosser Grassbrook 17, 20459 Hamburg, Germany.

For further information, please do not hesitate to write to [email protected]


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the maritime economist - spring 2015

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