Congestion in Seaports, Literature Review Overview- Globalization Essay

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Congestion in Seaports, Literature Review

Overview- Globalization and modern technology over the past 20-30 years has increasingly caused complexity and overcrowding with the world's seaports. In fact, in 2008, the IAPH World Port Conference was so alarmed by trends in the industry that it outlined what it say to be three critical issues and challenges facing global seaports:

In the increasingly complicated global environment, it is vital for port executives and experts across the globe to share information and ideas.

The world port community is vital for the global economic health, and must effectively address global issues like maritime security, environmental protection of the oceans, and communication with host countries.

It is naive to think that port management issues are solvable by one port, one country, or even one region. It is also inefficient to do so. Instead, with modern technology, IT applications, technical data, and the exchange of human capital and resources, teams of individuals will be necessary to protect these vital global assets.

In fact, global shipping is increasing, not decreasing, and with it, the number of seaports necessary to handle total freight volume. The writing is on the wall, and it is up to the IAPH members to step up, take the leadership role, and ensure success for new or remodeled ports. The true benefits of a global economy will not, in fact, be apparent until global ports are strategically aligned (Inoue 2008).

Literature Review - When dealing with the subject of large seaports, the challenges and issues affecting the industry as a whole may be summed up in five major categories: challenges of globalization, technical management, economic realities, logistic management, and safety and security. All of these issues -- particularly in the age of globalization, transportation by ocean going vessels is not only becoming increasingly popular, but due to the size of the newer vessels, increasingly complex. Large port services must deal with numerous transportation and resource issues, as well as the technical complexities of managing cargo, shipping lanes, loading and unloading, customs activities, and legal enforcement issues. Additionally, the complexities of a vast number of human resources working for disparate companies, many multi-national organizations; anchorages and fees, tug and harbor captains, warehouse storage issues, allocation of physical resources, and more. Port Management, then, is the efficient management of all the activities that surround the shipping industry for a particular port (Alderton, 2008, introduction). Each of these challenges presents itself in varying degrees to almost every port in existence. In terms of the physical nature and structure of ports, though, the actual generation of the structure often defines the paradigm with which the organization operates. Typically, older ports are more reactive, newer ones, more proactive. Logistically, this makes sense in that newer technology and construction anticipated the demand and needs of the modern shipping organization. Indeed, globalism is changing the world's transportation market so rapidly, that often ports are unable to even maintain the level of service from recent construction, leading to the question of what is needed for the new, fourth, generation port structure (Paixao and Marlow, 2003).

Challenges of Globalization -- Within the last few decades, the push towards globalization of transportation and economic development has fueled vast amounts of new industry, new issues of supply chain management, and an increase in the complexity of shipping. Ports have historically been recognized has the very nerve center of economic development, and as domestic companies in the United States and Europe move many of their operations to the developing countries, shipping becomes even more of a strategic issue. Because there are far more shipping destinations, the increase in volume only increases this demand (Levinson 2008).

Technical Management -- Thankfully, shipboard and port technology has developed along with the volume of shipping. With sophisticated global tracking units both the port and the client are typically never out of touch, and issues such as weather and other delays can now be managed more effectively. Sharing of computer-based networks allows the port to prepare for the arrival and departure of clients in a more efficient manner; this is improving but by no means standardized yet. It is important that rather than continue to rely on human resources and brainpower, modern technology be seen as the best resource for handling complex cargo routes, illegal shipping, banned products and contraband (Rodrique, 2009). One such example is the crowded port of Long Beach in California. Traffic is, in fact, moving from Long beach to other ports in Mexico and Canada because the port is unable to adequately manage and serve a lengthy supply chain effort.

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This has major implications for a number of other companies that rely on this port for the arrival and distribution of goods (Greenmeier, 2004).

Economic Realities -- The simple reality is that seaports have always been a conglomeration of complex traffic, commodities, bulk cargo, perishables, and odd deadlines. The logistics and economics of managing such disparate substances has thus always been complex Additionally, even though shipping is going through a vast globalization stage, the economic situations in varying countries remains disparate, making it difficult to adjust the pricing of fuel and supplies on a consistent basis. Port management is also becoming increasingly competitive, with ports now vying for the business of new and consolidated shipping concerns. This requires investment in their own economic and technological growth, as well as an active marketing campaign designed to increase profitable business (Heaver 1995).

Logistics Management -- Port cities must change and adapt to the new world of global shipping. From the 1990s on more and more Asian nations (and economies) became involved and dependent upon international shipping. Because these nations have not had a long history of portage and modern construction, a modern spoke and hub paradigm must be developed to ensure a lack of overcrowding. This model must be modern, must have room for larger ships and reload parameters, storage areas, networks (rail or road) to offload and reroute cargo, and use every available tool to reduce past port inefficiencies (Talley, 2009).

Safety and Security -- As uncomfortable as it is, the reality is that the global transportation industry as a whole has been dramatically affected by the terrorist bombings of September 11, 2001, and the subsequent conflicts and additional activities by groups such as Al Quaeda. Security issues surrounding port cities, particularly in Europe and the United States have become a bureaucratic nightmare, with more and more documentation, cross-checks, and labor and time intensive activities contributing to the rising costs of portage. Unfortunately, ports must also work towards a much higher level of security in this modern age of terrorism and international crime; massive shipments of tempting goods must be protected in an efficient manner for global port systems to work well (Branch, 2007, pp. 216-18, 321-2).

The Mediterranean in Flux -- Causes of Congestion - Historically, of course, European ports ruled the world in commerce in the 16th-19th centuries. After World War II, however, global shipping changed, and even up until the early 1990s, most Mediterranean ports were excluded from the major Asian trade routes. Most shipping companies, for a variety of reasons, preferred to call at Northern European ports and then have the goods shipped to Southern and Eastern Europe by truck or rail. However, this changed with globalization's policies of relocating manufacturing activities to countries with low barriers of entry, lowering of trade barriers and tariffs, and an almost alphabet soup of Free Trade Agreements. In fact, the share of Asian to Europe routes rose from less than 20% in 1984 to almost 40% in 2004, thanks in part to a new European Union and the foresight to provide economic development where it was needed (McCalla, 2008). Globalization, in effect, means that actions centered in the larger ports anywhere in the world strategically and tactically affect all other ports, especially in terms of congestion.

Solutions - In order for the modern port to continue its crucial role assisting in the transport of global goods, ports must be willing to modernize (e.g. move from second to third generation, or from third to fourth), but not for the sake of modernization, rather in order to partner with the shipping companies as part of the total supply chain. Production and productivity go hand in hand with the challenges of port management. Ports must provide more integrated logistical services and become much more than the interface between sea and land transportation, In fact, the macro model should view ports as integral in the entire supply chain management process. Ports should then take an active, never passive, role to see that it is a positive and proactive part of that chain that maximizes profit and productivity in each step. To do so, though, short-term planning and putting out fires must give way to strategic action that assists the security, safety, and environmental compliance necessary in the modern world; and most assuredly to bring in new technological solutions that can easily interface with both private and public entities. Additionally, it is….....

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