A Study on analyses of Container Ship Dwell time for competitive power of Pusan port

Abstract

Due to the economic boom in China and the development of shipping industry in east-Asian, most of ports focus on develop their Hub & spoke system. The competition in maritime market is dramatic intensely. Busan port faces a very serious challenge nowadays.

The freight rate is sensitive in maritime market. The cost of transport is a very important element for shipping companies. As a result, to reduce the total freight rate is one of the main issues for shipping industry.

So the shipping companies try to reach the economic scale by using the bigger ships.

The born of ultra-large container ship reduce the total number of container ships. But the call of ultra-large container ships cost more time on loading/unloading in the port. It increases more waiting time.

Shipping companies can save time and reduce their cost by using a more efficient port.

If the ultra-large container ship uses the multi-user terminal, it will cost more demurrage because of the limited capacity of port.

Nowadays, there are 16 berths which can accommodate 10 thousand tons ship in Busan port. Singapore has 41 berths, Gobae has 37 berths, Kaohsiung has 27 berths and Hong kong has 22 berths. Compare with the other hub ports, Busan port has fewer berths than the others. The main competitor of Busan port - Shang hai port has 18 berths.

The ratio of container freight increases. But the port of Busan can only accommodate 59% of the current calls because of the lace of the facilities.

In this paper, I’ll use the ratio table of ship Dwell time which is presented by UNCTAD to a berth share of Ultra-large container ship , and I’ll use the Methodology of study from Goss, R.O. and Mann to calculate the cost for Ultra-large container ship.

The time cost of ship and cargoes is one of the most important data for decision-making of port investment and operational efficiency. Studies in this area were initiated internationally by Goss and Mann in late 70’s,

It presumes a demurrage on the basic of Goss and Mann theory and methodology (1977). And this way’s another name called Shadow Price Methodology.

This methodology does not get the especially service for real market.

The shadow price is the change in the objective value of the optimal solution of an optimization problem obtained by relaxing the constraint by one unit. In a business application, a shadow price is the maximum price that management is willing to pay for an extra unit of a given limited resource. If ship waiting in the port leads to demurrage because of the ship dwell time, the cargo on the ship will also increase the accumulation of freights cost.

The demurrage’s calculation and accumulation of freights cost which are applied by Goss and Mann theory and this methodology to the capital of social opportunity cost are based on the social discount rate