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Will blockchain lead to a new maritime revolution?

blockchain

Introduction

The name may seem odd, but it is currently the subject of several discussions in the logistics sector. The blockchain could revolutionize operation management in several areas, including transport and logistics. Given its growing popularity, many are talking about a new internet revolution.

Napster, and later LimeWire, pioneers of music file sharing services already use the technology. Bitcoin is another example. Because digital money is also based on peer-to-peer distribution, exchanges are made directly between individuals as it is the case for paper money.

There are many advantages for using blockchain technology and this is why several large transport projects are now in the experimental phase. The results of these tests will give us more precise information on this subject.

1-Main blockchain’s characteristics

While most computer systems are built as client-server systems, peer to peer directly distributes data to all users of a network without intermediate servers. The different components of the network interact, but without hierarchical structure, making the management of this network autonomous. It is the duplication of data to all members of the network that eliminates the need for centralized system.

The blocks

Blockchain is in fact an application of a peer-to-peer exchange system which integrates added value services. These transactional services are called “intelligent contracts”. They are directives for conditional execution of certain tasks and are incorporated in blocks of instructions.

The process

The process is as follows. After registering recent transactions, a new block is generated, new transactions are validated by consensus of network partners and then added to a long string of previously created blocks.

The ledger

All blocks are registered in ledger that is distributed in the network. Content is encrypted and accessible by members, but can not be edited or deleted. This guarantees the authenticity and security of the network and Lire la suite

JUNE 2017 BUSINESS RESILIENCE PLAN IN THE MARITIME SECTOR

Resilience planPlans de continuité des activités

Introduction

This article is not a pedagogical guide or a scientific method for carrying out Business Resilience Plans (BRP). Rather, its objective is to highlight elements specific to the maritime sector.

Readers interested in acquiring further knowledge may refer to several excellent documents. (ex. Community Resilience Planning Guide )

This article is divided into two parts. The first provides a definition of a BRP. The second, focuses on a BRP in the maritime sector.

 

Part 1: Business Resilience Plan in General

1.1 What is a Business Resilience Plan (BRP)

A BRP’s goal is to ensure resumption and continuity of an organization’s activities following an event that disrupts its normal operation. It must allow an organization to meet legislative, regulatory or contractual obligations as well as economic requirements (risks of losing market share, survival of the company, image, etc.) following a particular event. Building BRP also includes identifying potential threats to an organization and applying a framework to ensure the organization’s resilience.

This type of plan has become, over time, an industrial standard rather than an exception. Increasing criminal and terrorist acts, transportation of dangerous products, risks of accidents damaging environment and health are among the causes. Most large and medium sized companies currently have some plan developed, to respond to a major situation. Many of them would face closures if their services were interrupted for any period without such a plan.

A BRP can forsee compliance control measures and an higher frequency of controls. Howerver, its main purpose is not to predict the nature of such measures to be implemented in order to prevent them. The is rather identified as a prevention plan, generally subject to a set of standards or regulations.

It should be noted that losses due to natural or man-made disasters are becoming increasingly important in Lire la suite

WILL TRUMP’S ENERGY POLICY STOP DEVELOPING RENEWABLE ENERGY ?

1-Significant efforts to reduce greenhouse gases around the world

For several years, significant efforts have been made to promote renewable energies. It has been arduous and time-consuming to implement commitments of the Kyoto Protocol and the Conferences of the Parties (COP) United Nations Framework Convention on Climate Change. Almost 20 years were needed to develop concerted action on this issue among the world’s major countries. 1

The Paris Agreement of 2015 (COP21) is historic because it engages 195 countries to reduce emissions of greenhouse gases and to stabilize climate warming due to human activities to less than 2 ° C by 2100. [1]The main means used is the gradual elimination of fossil fuels, the main source of air pollution. It is estimated that global emissions of greenhouse gases (GHG) has reached nearly 49 billion tons of equivalent of CO2 in 2010 (latest data from IPCC ), increasing by 80% between 1970 and 2010.

The 2016 conference in Marrakech [2] reinforced the commitments of 2015 accelerating the adoption of the modalities by two years. The next conference will be held in Poland in 2018 and will provide an opportunity for several countries, such as Canada, Germany, Mexico and possibly the United States, to present their strategic plan.  [3]

Trump compromises 20 years of effort

However the election of Donald Trump has changed the situation and compromises effort of 20 years. Any global agreement cannot be held without the participation of all the major economic blocs lsuch as United States, China or Europe. The United States backing down could have a detrimental effect on other countries for reasons of competitiveness: the cost of producing fossil fuels is still lower than other types of renewable energies. The difference of costs can be regarded as unequal competition. In short, for this reason, the … Lire la suite

The real impact of CETA: Global Economic and Commercial Agreement  

CETA

CETA WILL GIVE ACCESS TO 500 MILLION CONSUMERS

The Government of Canada claims that the Canada-EU Comprehensive Economic and Trade Agreement (CETA) will give Canadian companies preferential access to 500 million European consumers, a market evaluated at $ 18 trillion[1] [2]. Accordingly, bilateral trade would increase by 20 percent and would increase Canada’s GDP by $ 12 billion a year. This would create nearly 80,000 new jobs and increase the average Canadian household’s annual income by $ 1,000. [3]

Are these predictions realistic ? What are the business opportunities for transport and maritime companies? In order to answer these questions, this text analyses the figures of Canada’s international trade with the rest of the world and the European Union. It also attempts to estimate the impact of this agreement on transportation and the Canadian marine industry.

1-SUMMERY OF THE AGREEMENT

The CETA is considered a modern and innovative agreement because it covers a wider field of activity and is more permissive than other free trade agreements, such as the WTO’s General Agreement on Trade and Services (GATS) or NAFTA. The main provisions concern directly or indirectly the maritime sector.

1.1 Non-discriminatory rules for the goods, services and public procurement sectors

The rules of the “national treatment” and the “most favored nation” are maintained for both the goods sector and the service sector. The first rule requires equal treatment between foreign firms and local businesses. The second rule provides that the signatory parties must give each other at least the same advantages as they would accord to a third State.

CETA also provides that Parties may not adopt or maintain measures to limit the number of enterprises, the value of transactions, the number of transactions or natural persons, and the participation of foreign capital.

1.2 Elimination of tariffs and

Lire la suite

JANUARY 2017, MARITIME REVIEW, TRENDS FOR 2017

conjoncture 2017

INTRODUCTION

As 2016, three trends will describe maritime industry in 2017: 1-an increased volatility of demand 2- a sustained but uneven global recovery 3- a restructuring of the maritime supply.  This text presents an analysis of these trends.

1- An increased volatility of demand

1.1 New external factors

Variability of the risk makes demand for transport less predictable. In 2016, several factors triggered this instability, including fluctuations of exchange rates, slowdown of Chinese economy, lower oil prices and difficulties of the European economy.

In 2017, recovering of American and European economies is well engaged. Despite a slight slowdown of the GDP of the United States in the last quarter of 2016, one can anticipate a still dominant position of the U.S. dollar will continue in 2017.  The impact of a strong U.S. dollar boost U.S. imports.

In return, other external event to the industry are related to international political situation. The intention of Donald Trump to review several agreements of free-trade (NAFTA and the transpacific Partnership), the vote on the Brexit inducing the exit of Great Britain of the European Union are some examples.  The rise of protectionism could have the effect of undermining the global economic recovery.

In the sector of maritime transport, two important events occurred in 2016, the bankruptcy of Hanjin Shipping and the opening of the new Panama Canal.

Some believe that Hanjin Shipping’s bankrupcy it is precursor to a major crisis (Gerry Wang, CEO de Seaspan) in the industry. Hanjin’s situation is not unique and other maritime companies are also in difficulty. Because, recessions are the result of a chain process, if other bankruptcies were to happen, the effects could be devastating on the financial institutions, the clients or suppliers and shippers. It could even slowdown entire world economic activity.

In the case of the … Lire la suite

December 2016 Flags of convenience

Flags of convenience

THE CURRENT SITUATION

A flag of convenience is the flag of a vessel for which the actual property and control are located in a country other than that of the flag under which it is registered. For the owners of these vessels, the benefits are numerous,[1] including in the field of taxation, of security or labor law.

It is a phenomenon related to globalization. In 2015, they represented 71% of the total tonnage of the merchant navy. [][2] The world fleet operated under 152 pavilions. Three of these pavilions, Panama, Liberia and Marshall Islands accounted for 42.8% of the total capacity; either, 710 million tonnes (Mt) and 12 000 flags of some 50 000 vessels navigating the oceans. Panama dominates with 20.7% of world tonnage with[3] 343 Mt and 6 745 ships. Followed by Liberia with 1990 Mt and 2 996 ships and Marshall Islands with 168.6 Mt and 2 345 ships.[4]

None of those countries are among the major owners. The real and principal owners are Greece, Japan , China and Germany, which accounted in 2015 a capacity of 864 Mt and 16 752 vessels. Greece is largest owner with 308 Mt and 4 252 ships, mainly of bulk carriers and oil tankers. Japan comes in second with 242 Mt and 4135 Ships and China with 190 Mt and the 4720 ships.  [5]

MARKET FAILURE

This disproportion between the ship’s country of registration  and of countries owners is symptomatic of a market which is not efficient (Market Failure ). Flags of convenience and tax havens have no economic impact to added value of services, products or the development of markets.

It is a vicious circle, because the oligopolistic structure of the industry encourages imitation in order to protect market shares; the initiative of one will … Lire la suite

November 2016 Transportation by barge as an alternative to intermodal transport

Use of transportation by barge

The systems of transportation by barge have long been used as an alternative to land transport. This mean of transportation is competitive to trains and trucks. In addition, it significantly allows the reduction of the environmental footprint of the transport of goods.

There are two major segments in the market, long and the short distance.

Long-distance is used in large rivers, such as Mississippi, Rhine, Danube and St Lawrence in transporting the goods from one end to the other of the continents.

This system is competitive to trains and trucks, but its performance depends greatly on the quality of the underlying infrastructure and the interconnection of the navigational channels. In return, barges offer the advantage to adapt to different types of products transported and allow more flexibility for the navigation on the various courses of water. They offer capacities ranging from 350 to 11 000 tonnes of deadweight and use proven technologies.

On short distances, this type of transport is growing and presents new opportunities.  Pilot projects have demonstrated this effectiveness, in particular, to reduce congestion in the areas of access to port sites of international trade.

Despite the high volume of activities and the economic benefits that flow from port activities, access to facilities remains constrained due to the movement of trucks and trains. The comings and the goings of land vehicles pose a problem by the noise, air and ground pollution, and by the loss of time related to the traffic congestion. In addition, the congestion of port activities reduces the effectiveness of the supply chain by increasing the time of distribution of the goods to the markets of destination.

To solve these problems and, as a counterweight to the costly alternatives that the investments represent in the construction, enlargement and the optimization … Lire la suite

AUGUST 2016 FOR THE DEVELOPEMENT OF SHIPBUILDING INDUSTRY

A WINNING MARITIME STRATEGY

Can governments contribute to the development of the shipbuilding industry without resorting to public procurement? In a North American context, can we gain market share on Asia, the dominant player in this field?

A report released by researchers at the National Defense University (Eisenhower school) in the spring of 2015 partially addresses these issues. [1] It concludes that they are competitiveness problems in the  U.S. industry against Asia. China, Japan and South Korea now occupy more than 80% of the market share of shipbuilding on the commercial segment contracts.

Analysis of the strengths, weaknesses, opportunities and threats (SWOT), [2], highlights the importance of the national defense budget to compensate for the weaknesses of U.S. industry in the commercial segment.

Currently, this industry survives almost exclusively  on public procurement, notably with the military sector. It represented 38.1 billion $ in 2014, and is expected to grow annually by 3.9% per year until 2019, or 46 billion $. Barely 15% of revenues of the U.S. industry are related to the export.

One of the flagships of the report recommendations is that,  in order to ensure predictability of revenues of the industry, a strategy of public long-term purchases is necessary, as what presumably has been done in Canada. [3] However, an approach which uses public procurement for economic development purposes may have some shortcomings: it makes governments abdicate the implementation of structural measures for commercial market development; it distorts the objectives of a public policy of national defense in favor of strictly economic ones and, ultimately, undermines the efforts of the industry to increase its productivity, which would make it more competitive commercial international markets.

We must recognize that government contracts are important to ensure and maintain shipbuilding industry’s development. But dependence on collateral in the long term, as … Lire la suite

JULY 2016 – THE CONDITIONS FOR SUCCESS OF THE NEW PANAMA CANAL

The Panama canal

Introduction

On June 26, the Government of Panama announced, with great fanfare, the completion of the expansion of the Panama canal. It was a historic event for this small Central America country. The crowd was awaiting the traverse of the first container ship, a Cosco ship from Asia, measuring 300 meters long, 48.25 metres wide and capable of carrying 9 500 containers (TEUS): two times the maximum capacity of the old locks.

62 international delegations were invited to listen to the speech by President Juan Carlos Varela Rodríguez. The event reflected the project: the Panama canal plays a strategic role in international maritime transport. For the population of Panama, expectations are high, since this project will hopefully revive the country’s economy and restore the market share lost over time to the Suez canal.

Although the promotional campaign of the Panamanian Government is fully justified, studies on the impact of the project leave many elements imprecise and uncertain. The complexity of the world situation and the state of international trade which has evolved in recent years may explain it.

According to research conducted jointly by The Boston Consulting Group and C.H. Robinson, as much as 10 percent of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020. Other research also suggests that the expansion of the canal will impact the trade of bulk, especially between Asia and America.

However, several market conditions are necessary for the achievement of these forecasts. The following text presents an analysis of these conditions.

The role of Panama

A strategic location

The Panama canal plays a strategic and undeniable role in global transportation. It significantly reduces the distance required for the transport of goods. Transportation costs are substantially reduced, as are the price … Lire la suite

JUNE 2016, OVERVIEW OF THE CANADIAN MARITIME ENVIRONMENT

By 2015, a lower demand for natural resources has had a considerable impact on the volume of cargo handled at Canadian port authorities.  There is a slowdown in activities in almost all port sites. However, this decrease has been more pronounced for 2016.

To understand the differences and determine cause of the declines, we will present an analysis of the activities of three Canadian port authorities; those of Vancouver, Montreal and Quebec City. In this regard, a composite indices measuring the Canadian port activity have been developed. These indices are based on trends in the international trade of  over 50 products shipped to  Canada (see annex to this article) and reflect the handling of volumes of industry trends. They can be used for comparisons, forecasts and calculations of optimization under constraints. Graphics that accompany the text illustrate both indices obtained from the actual data in the annual reports of the port authorities, and forecasts of the indices that have been developed.

ANALYSIS OF PORT SITUATIONS

The port of Vancouver

Vancouver-indexThe port of metro Vancouver is the largest port in Canada and one a major exporter of coal, minerals and wood products. In 2011, handled products, (including containerized products) grew from 122 million metric tons (mt) to 138 mt. It is the third most important port in North America, after South Louisiana (242 mt) and Houston (216 mt). The port of Vancouver metro ranks higher than the port of New York (120 mt). 80% of handled volumes are exported compared to 20% for imports.

Other major shipments from the port of Vancouver are (10.8 mt) wheat, cereals including canola (6 mt), large quantities of sulphur (2.6 mt), potash (8.7 mt), coal (35 mt), crude oil (1.96 mt) and forest (23 mt) products.

The decline that is indicated by the index, between … Lire la suite

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