Fromthe last decade, shipping lines are moving towards value added maritimebusiness. The business comprises on forward and backward integration of regionalor global supply chains system. Nowadays most of the shipping lines more orless involved in this business.
Many new trends are introduced in maritimebusiness from recent years. Companies want to make his company more efficient and productive at less and minimum expenditure.Cost cutting and efficient time utilization make to this business moreproductive and innovative, which brings co-operation amongst the carriers,ports, freight forwarders, maritime logistic and others maritime relatedactivities. Port studies are belonging to localizationwhom have not coherenceand ports are emerging fields of study(Pallis et al 2010).ResearchBackgroundMaritimetransport is very important as means of transfer of cargo and passengers.
Maritimetransports accounts for carry 90% of trade in terms of volume round theglobe and shipping routes at high seas, territorial waters and at exclusiveeconomic zones are easy to found, with the use of technology it is easy tounderstand depth and width of different routes. Below mentioned figure isshowing some important sea routes of the world. Interest is diverted more afterMarkove theory which elaborated that risk and cost is linked with machinery breakdownsin container terminal(Mennis et al 2008). Increase in size of terminal anddecrease in ship size brought trade-off between the both, terminal sizeincrease a cost of operation (Musso et al 1999).
Source;thumbs.dreamstime.com/x/worldshipping- routes –map-29032068.jpg Ourpresented research is an extension of Ligou Wang, 2010/2011 research; ourresearch is in perspectives of Pakistan. Diaz et al 2005, introducedmultioutput cost model in which he calculated product economy of scale, economyof scope and specific marginal cost, it help to identify cost advantage and pricesetting of product.
The recorded cargotransported through sea was 7843 ton at 2010( UNCTAD 2010) The cargo istransported by using shipping routes mentioned in the above figure, Cargoloading and unloading also held upon arrival of ships at different ports.Terminal evaluation started in different phases concentration on planningmethod, facilities utilization and their measurement and use of modelling(Goodchild and Daganzo 2007, Laik and Hadjiconstantinous 2008, Wiegmans et al2004) These ports located on theirrelated shippingroutes provided loading and unloading in their own suitable operationand according to their check of lists. Nowadays port function and operation isextended beyond the loading and unloading. Ports are efficient and more productiveafter adoption of new changes and technology. If the port become need ofshipping lines inorder to enhance logistic services the changes considered tobe acceptable change at port (Mangala 2004). Changing role of supply chain impressedfrom previous literatureof Peters 2001, Carbone and De Martino 2003. Bichou andGray, 2005 focused on different management approachescomprised on strategic,operational and organizational approaches of port management.
PROBLEMSTATEMENTShippingcompanies are used different standards during the carriage of cargo forselection of route, and discharging or loading port. Past research indicatedthat shipping companies considered port draft, charges, and port handling capacityduring the selection of port of call. The port selection criteria are totallychanged in global supply chain. Port which is connected with hinterland is bestsuited in higher cost as compare with not hinterland connected port at lowestcost because it effect to overall supply chain cost of business. At thehinterland multimodal transportation is available which reduced overall cost ofoperation.
Lot of research has done on global logistics and on maritimelogistic to conclude changes at port. We are trying to explore further inperspective of global supply chain, according to shipping lines we statedcriteria for selection discharging and loading port. Portchoice and decision maker for port selectionTheparties which involved in selection of port for minimize the cost of operationand maximize the overall benefit for whole supply chain process are indicatedby Ding 2007,that following stakeholders are involved in selection ofport along the logistics chain, stakeholders are as follows,· Shippers ,· Consignees,· Shipping lines,· Port authorities,· Freight forwarders,· Logistic services provider,SHIPPERS,Shippersand freight forwarders are same only difference is that shippers are less pricesensitive as compare to freight forwarders, which means that shippers are less priceelastic(Langen, 2007). Another definition of shipper according to the Glossaryof Maritime Terms 2001 is that” individuals or business who tender goods orcargo for transportation-usually the cargo owners or their representatives andnot to be confused with the party issuing the bills of leading or the ship’soperator who is the carrier shippers and freight forwarders” (Glossary of Maritime Terms 2011).
CONSIGNEESItis an individual who make contract with carrier and actually receiver orimporter of cargo, it decides port of call according to feasibility andavailability of transport.SHIPPING LINESShippingline role in port selection is increasing day by day a team composed on threeor four freight forwarders decided to selection of shipping line and chooseport which served by selected shipping line( Tongzon, 2009). According to theresearch of Tongzon and Sawant 2007, Chang et al 2008, and Lim et al 2010,shipping line serve as media between freight forwarders, supplier, customer,shippers and it is also media between ports in terms of port selection. Tongzonand Sawant, 2007 referredthat shipping lines enhanced their business towardslogistic chain which is depend upon port services.
FREIGHT FORWADERSBysea transportation and carrier is hired and arranged by individual who iscalled freight forwarder. In selectionof port, location and charges are two main factors(Tongzon, 2009). Value addedgoods and inland transport is more important but freight forwarders aresensitive to port charges(D’Este and Meyrick, 1992).SUPPLY CHAINThemanagement system begins from raw material and ends at final consumer whoreceived prepared or finished product, system operates with co-operation othercompanies (Council of Supply Chain Management Professionals).
RESEARCH OBJECTIVEMyresearch comprises on port selection in global supply chain perspective andstated new criteria for port selection, through the research we redefined alink between port selection criteria and global supply chain. Criteria of portselection focuses on some factors including port location, port hinterland,suitable draft, technology, handling charges, cargo volume, research is anextension of Ligou Wang research in the perspectives of Pakistan. We redefinedin perspective of global logistics and shipping lines. The research assessesthe effect of existed criteria on competitiveness of regional ports.
RESEARCH QUESTIONSWeanswered to three basic questions in this study. The questions are organized tomake the research more detailed and interesting in this specific field ofmaritime and shipping business. We figure out some factors through the answerof these questions. One main question of the study which deals in wholeresearch and two sub questions are also included to research deeply.QUESTION1; does container shipping change due to its involvement into global supplychain?QUESTION2;how do shipping lines react to these changes and respond to new challenges inthe business of shipping and maritime management?QUESTION3; how these changes criteria effect to performance of container shippinglines.
METHODOLOGY OF RESEARCHFirstat all we review previous literature to investigate and conclude previousresults with the aim of compare previous and new criteria for port selection inthe perspective of global supply chain perspective. Previous results alsosupport to empirical research in context of new results and model.AHP (AnalyticHierarchy Process) model will be used to prove the research and data collectedby use of questionnaires to targeted peoples related to this business. Theresults which are collected through AHP model analysed again by average,quartile (statistical techniques), Implication of results will also assessed,acceptances for changes of criteria for port selection.SIGNIFICANCE OF THE STUDYTheresearch will help to policy maker of different countries in selection of mostefficient and favourable port for business.
It also provides benefit andopportunities for several stakeholders in global supply chain, introduce newinnovation in selection criteria. Previous researchers also concluded but dayby day advancement change the selection criteria for ports which we tried tocovered through AHP model. Port selective criteria in this research composed onfeeder services and intermodal connection, port draft, port efficiency and ITability, port location, size of hinterland, volume of cargo and cargo volume.Four main ports are used to prove weighted model and ports are Hamburg,Rotterdam, Antwerp and Le Havre. Port of Rotterdam and Hamburg are ”must call”ports for several shipping lines (Notteboom, 2008)SCOPE OF THE STUDYOneof the scopes of research is to provide best suited criteria of port selectionfor shipping lines which are operating in global supply chain. Verticalintegration is best option to enhance business which provides advantages indifferent ways like enhancing market power and visibility, cost reduction anddemand complementarities (Heaver, 2002). The research covers to port charges indetail including the THC (Terminal Handling Charges), port dues and also countsleast factors in port selection criterion. FURTHER RESEARCHWerecommended influential criteria forfurther research which is about the consignee who operate with poor or lessknowledge about the ports e.
g. Rotterdam and Antwerp are two ports customerwill consider and influence by Rotterdam due to good reputation but unawareabout the criteria of selection. Another recommendation is about the categoryselection among the variables discussed in this research, the research will bemore precise and better for competitiveness. Port logistics efficiency isanother recommendation which provide benefits for all involved stakeholders.RESEARCH LIMITATIONWeused three hierarchies in this research which is most basic hierarchy’s structure.
The structure is not fully optimized due to time limitation. This is alsorecommended for further research in this context which will reduce complexityof selection criteria. The research have vast domain and different stakeholdersinvolvement from port authorities, government regulatory, port statutorybodies, so realistic data is not possible and some assumptions are made forvalid conclusion.THESIS STRUCTURE AND ORGANIZATIONStructureand organization of thesis is defined properly in policy of NCMPR BahriaUniversity Karachi Campus, as per policy thesis comprised on 6 chapters, eachchapter perform stair step for completion of taskChapterone comprises on introduction to criteria of port selection in global supplychain perspective, background of the problem and statement about the reason ofresearch.
Chapter one also describes scope of research, significance ofresearch, limitation and questionnaire of research, purpose further research inthe relevant field.Chaptertwo covers to literature review about previous research, chapter also discusspros and cons of proposed criteria of port selection in global supply chain,also assessed implication of proposed port selection criteria. We introducedprevious research into groups of port selection criteria, port competition andliner shipping market.Chapterthree describes to research method used for collecting and analysing the data,mainly AHP is briefed in detail, questionnaire design, and analysis of factorsfor selected criteria. The chapter also about research methodology adopted forcompletion of thesis.Chapterfour incorporated to data analysis and empirical finding at Northwest Europeanports Le Harve and within Hamburg. Companies will be examined from variousfactors and we will implement AHP model to produce best result and conclusion.Test of the questionnaire and results are presented in the chapter four.
Interpretation of result and performed AHP model results are indicated.Chapterfive comprises on comparative analysis of results and findings, results areanalysed by competition point of view and port development, some new conceptswill be introduced in this chapter and existing issues in selection of portcriteria discussed in detail. Implication of criteria selection and portdevelopment are included in this chapter.Chaptersix covers to recommendations and conclusions which based on model result.