Fritz Pinnock, Contributor 
Pinnock
LINER SHIPPING has been transformed since the mid-1980s by the globalisation of the world economies created by the internationalisation of production and its key elements (funds, people, resources and techniques). Asia for example, has increased its production capacity to serve the major consumption centres of Europe and North America. Significant changes in trade structure between the mid-1980s and mid-1990s stemming from the establishment of regional production centres and supply centres within Asia have tripled shipping volumes. The increased volume and expanded trade routes have raised customer requirements for faster, punctual, frequent, reasonably priced services covering a wider range of port supported by accessible information systems. An added momentum to this process was the US Shipping Act, 1984, which accelerated worldwide deregulation in Liner Shipping.
This globalisation of Liner Shipping has been achieved through larger ships and an associated reduction in the number of carriers, improvements in service quality and the strengthening of competitive capacity, and merger and acquisition and for strategic alliances. Alliances for the joint deployment of vessels were forged to spread financial risks, create superior services and to forestall an oversupply situation. The original globe-spanning alliances were established by 1996 (eg. Mitsui joined with APL, Orient Overseas Container Line and Ned Lloyd to form the Global Alliance in 1994). Further merger and acquisition led to a regrouping of alliance memberships (eg. Mitsui joined with APL and Hyundai is the new world alliance in 1997).
Consolidation in the ocean shipping industry has affected the distribution of trade volume between carriers and ports. Alliances have centralised capital to build bigger, deeper draft vessels leaving the port to invest in channel and berth deepening to accommodate them. The bigger the customer the stronger is their clout in obtaining port services.
Bargain power
Concentration of volume within alliances and mergers (de facto alliances) has magnified their bargaining power. If one line decides to change terminals or leave a port the effects can be disastrous. This increased bargaining power is seen as inter-port competition: Kingston Wharves versus Kinston Terminal Operators, K.T.O versus Freeport Bahamas. The danger is that immobile ports invest heavy sums while mobile alliances do not invest anything. Already alliances have gained too much power over stevedores, terminal operators and port authorities. Ports need to respond through consolidation.
For long-term trends in the shipping industry reflect its response to globalisation of the world economy that has brought demands for higher levels of transport efficiency. These are (a) the emergency of over large lines and alliances.
(b) the use of over large vessels making fewer calls on mainland routes, with the attendant requirement for more feeder services.
(c) the Creation of more door-to door services to offer a complete logistic solution.
(d) the increasing use of computerised systems and information technology.
Port Organisations have responded with:
(a) Larger port and terminal alliances.
(b) Global port hub and spare networks.
(c) Expansion into intermodal and other ancillary services.
(d) Increasing use of information technology.
These elements have been incorporated in Hutchinson Port Holdingsi (HPH) strategy, which involved moving from its Hong Kong beach head in the 1980s to creating a South China hub which involves a network of feeder ports and a deepwater port at Yantin as a single hub may not be enough. HPH has invested in 17 ports worldwide ranging from Asia (Shanghai, Myanmar and Indonesia), Europe (Felixtowe, Harwich and Thames port) to the Americas (Industry a transhipment hub in the Bahamas and ports at either end of the Panama Canal.
Looking ahead, such global port operations will seek to expand their networks to meet the anticipated changes brought about by increases in the number of multimodal operators, mergers among shipping companies and the approaches of mega-lines operating 12,000-15,000 TEU's super-container ships and 4,000-5,000 TEU's feeder vessels. The new global ports constructed on existing or new sites (eg. artificial islands) would guarantee large volumes and have move rates of 450-500 per hour. They would also provide super tanker-like drafts and advanced technology (including information technology providing details on the location and status of cargo).
