Essay, Pages 7 (1733 words)
What is port congestion? A port is a maritime facility which may comprise one or more wharves where ships may dock to load and discharge passengers and cargo. Since 1800, port of manila, the main port of the Philippines has been playing a critical role in the economic development of the country due to its direct impact to the flow of goods inside and outside of the country. The congestion reduces the terminal operational performances. They caused disruptions in the inflow of foreign shipments aggravating the condition of the supply chain of major businesses in the country leading to higher prices of goods.
The term port congestion commonly used to describe the situation where vessels have to queue up outside a port and are waiting for a spot so they can load or offload.
Ports have a limited amount of dockage and in most cases capacity does not match demand. That is why vessels usually have to wait in the anchorage, before being able to access the port and use the cranes or the pier.
Now, an anchorage is a location at sea where anchors can be lowered. The purpose of securely resting a ship at sea can be for waiting to enter ports as well as for taking on cargo or passengers where insufficient port facilities exist. Such locations usually allow vessels to safely anchor in protection from bad weather conditions and other hazards as well. Today, port congestion is growing worldwide, as an increase in container traffic over the past year and ongoing consolidation in the shipping industry compound other problems such as inefficient transfer to inland transportation, customs delays, and episodic weather- and labor-related slowdowns.
Rotterdam, Europe’s biggest container port (Port of Rotterdam), will have to be ready for future developments to stay the most attractive port to container carriers. This means the port has to face the problems that will arise with cargo volumes, container carrier sizes and customer demand all increasing in size. In spite of its modern container handling on the terminal, the port will face some big problems in the future with the loading and unloading of the container carriers. The usage of the container as a cargo unit has been on the rise since 1970 leading to a total of 11.6 million handled TEU containers in 2013 (Port of Rotterdam). The sheer number of handled containers underline the importance of having a streamlined container handling process. Port congestion has played, and is going to play a major role in the Port of Rotterdam.
Seeing that the port of Hamburg can also handle container carriers up to 18,000 TEU, and the ports of Antwerp and Felixstowe are also on the rise, big container carriers now have attractive alternatives instead of waiting in queue at the port of Rotterdam. Container carriers waiting in queue or in the port will cost the ship owner a great amount of money without moving any cargo. Container ports are complex pieces of infrastructure hosting a broad number of activities besides container loading and unloading, e.g., mending, pilotage, tugging, etc. With container cargo being a major part of today’s transport means and container carriers still increasing in size, one delayed ship can now disrupt the entire port schedule and thus congesting it due to the inflexibility of the port. This inflexibility is the effect of container terminals only being able to handle a couple of big carriers at a time and the time schedules being made months in advance.
Expanding the port will only be a temporary solution because transportation of various goods through containers is still on the rise and container carriers are still dependent on the ports for loading and unloading their cargo. The container carriers increasing in size will also be a problem for the cranes, they will not be able to keep up with the growth of the carriers due to their limited height and capability. While in the Philippines the port of Manila, the leading container gateway to the Philippines, is struggling with terminal congestion The Philippine Ports Authority said ports in the Manila region saw 9 percent growth in import and export container volumes in the first 10 months of last year. The increase followed a 5.7 percent rise in box volumes in 2017 to 4.8 million TEU to place Manila among the world’s top 30 international container ports.
We are going to compare between the ports of manila and rotterdam they are both struggling in port congestion they were struggling on how they accommodate big containers with their limited space in their port. In the data of the two ports every year the containers they accommodate are yearly increasing.
BACKGROUND OF THE STUDY
According to Philippine Ports Authority (PPA) said cargo volume increase 2% year-on-year in the seven months to July, with impetus for volume growth expected to come in the remainder of the year.
The PPA said cargo volume during the period was 147.271 million metric tons (MMT).It added that foreign cargo throughput grew 1.64% to 87.639 MMT, while domestic cargo volume rose 2.48% to 59.631 MMT.Notwithstanding the decrease in the volume of export cargo by 0.98%, we were still able to post a positive deviation in overall cargo traffic· We are still on target to hit our forecast of a modest cargo volume hike for 2019 in the high single digits or low double digits. The PPA said yard utilization at the Manila International Container Terminal, Manila South Harbor and Manila North Port was at 67%, while the berth occupancy rate was 59% during the first seven months.While volume growth was slow, PPA said this category was outperformed by container traffic and passenger volume.
Container traffic rose 9% to 4.309 million twenty-foot equivalent units (TEUs) on the back of improving domestic trade.Domestic boxes handled at the ports were up 10.37% at 1.755 million TEUs while foreign boxes rose 8.07% to 2.553 million TEUs.Passenger volume rose 6.63% to 47.592 million passengers in the seven months to July, with interisland travel still depended upon by much of the public to move around the archipelago, particularly in ports located in Bohol, Mindoro, Negros Oriental/Siquijor, Bredco/Bacolod and Surigao. The Philippines could waste trillions of pesos earmarked for the government’s Build Build Build infrastructure projects, if the issue of port congestion, high cost of inter-island transport, and other logistic bottlenecks persist.
Taxpayers’ money is already being spent to expand the network of roads, bridges, and port facilities that will facilitate movement of goods and services not just to and from other countries, but within the archipelago.Yet, simple systems to solve something as elementary as a port congestion issue, which truckers and importers recently brought up again, remain elusive. Even a promised joint administrative order to solve the problem remains unsigned for more than five months now. The accusation that the port congestion problem is being left to fester because some groups want to make a quick buck could contain some truth. The fines involved when container vans are not returned on time have run into six-digit figures for some, and this ultimately is at the expense of the consumer.
Trucking companies and importers have been saying for the longest time that the solution to freeing up space at the ports to accommodate incoming containers is to make shipping companies responsible for the containers that they bring in. This would mean shipping firms having their own container yards outside the port area where empties can be stored and retrieved for shipping out. The same goes for managing yard space so that used containers do not stay for unnecessarily long periods. The Philippines imports more than it is able to ship out, and because shippers want to optimize their trips by carrying cargo out to other destinations, they are more inclined to leave empty containers at the ports. The problem with this practice had been magnified with the increase in incoming cargo last year because of a three-fold rise in value of imported raw materials, as well as intermediate and capital goods. This year promises to be worse as importations for Build Build Build increase.
The Rice Tariffication Law, alongside the import liberalization of other food products, has also contributed to increasing the amount of cargo that is being shipped into the country. At the moment, for every five containers that bring in goods, only one is laden with merchandize for shipping out. It is understandable why shippers would rather leave empty containers, preferably at the port yard rather than in their own depots, because of the logistical challenges of getting them back on the ship. Getting them back to the port from the depots takes time and money, likewise with queuing them for loading onto their vessels. The management of empties costs shippers serious money, which could explain why shipping companies try to get paid all kinds of fees from truckers, brokers and importers when it comes to and getting back empty containers.
STATEMENT OF THE PROBLEM
The traffic through the Port is increasing along with the economic growth of Philippines as well as the neighboring countries. It has been frequently observed that incoming ships have to form queue and sometimes ships have to wait longer than necessary before berthing. In addition to that lack of adequate inland infrastructure to handle incoming containers give rise to the instance of congestion in both Cargo and Ship and delays in final delivery of goods to the importer’s premises with consequent increase in transportation and other costs. Therefore there is a need to study the effect of port congestion on port performance.
- What is the effect of port congestion on port performance?
- What are the factors of port congestion?
- What are the appropriate measures that need to be taken in order to overcome port congestion?
SIGNIFICANCE OF THE STUDY
This study would add knowledge in understanding the effect of port congestion on port performance. We believes that findings and recommendations of the study will be useful not only to decision makers for planning and implementing appropriate measures to overcome the effect of port congestion on port performance but also the study shows which appropriate measures should be taken by the government to improve port performance. The study would also contribute knowledge to other researchers who are interested in focusing their studies to this field and hence it is believed that findings would act as a springboard for further research in this field.