Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)

The liner shipping environment is a highly completive environment with low freight rates and a narrow profit margin. Acquiring bigger vessels to gain Economies of Scale (EOS) through spreading of the fixed cost across more containers is one popular way that many shipowners adopt to keep operating co...

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Main Author: Kwek, Sherwin Ming Loong
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Format: Final Year Project
Language:English
Published: Nanyang Technological University 2019
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Online Access:https://hdl.handle.net/10356/136556
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spelling sg-ntu-dr.10356-1365562022-07-14T05:52:22Z Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar) Kwek, Sherwin Ming Loong - School of Civil and Environmental Engineering Kenneth Tan kenneth_tan@tsasing.com Science Engineering::Maritime studies The liner shipping environment is a highly completive environment with low freight rates and a narrow profit margin. Acquiring bigger vessels to gain Economies of Scale (EOS) through spreading of the fixed cost across more containers is one popular way that many shipowners adopt to keep operating cost low and remain competitive. Such actions led to rapid growth in container vessel size along the years. This created a cascading phenomenon where the bigger vessels are displacing smaller ones. Cascading also impacts the trade lanes where the newest and biggest vessels will be deployed on main trade lanes, displacing the current large ships. These displaced large ships will then be redeployed into secondary routes and eventually to the liner feeder service routes, displacing smaller vessels. Surplus tonnages that are older or too small will be scrapped. A three-part study was conducted to investigate the degree of the cascading phenomena in the South East Asian countries as well as to evaluate the current liner shipping network in these countries to determine if cascading will cause an end to the liner feeder services in South East Asia. The study was broken down according to country. Each work package consists of 2 countries namely Malaysia & Myanmar, Thailand & Indonesia and Vietnam & the Philippines. Collectively, the 3 packages will cover the South East Asian countries. The key area of this paper is on the political/legal, economic and technical aspect of the country, its shipping and port activities. It highlights both the macro and micro view when determining the degree of cascading experienced in each country and the current liner network system before recommending on possible strategies for Main Liner Operators (MLOs) and Feeder service operators. Finally, it will link the points up to determine if cascading and the current liner environment will cause the end of liner feeder network in Malaysia and Myanmar. From the primary and secondary research, it reflects that cascading is restrictive towards causing the end of liner feeder service network system in Malaysia and Myanmar. In fact, due to the various stages of the political, economic, and technical development experienced in each country, it shows that the hub and spoke system is an important aspect of the liner ecosystem in South East Asia. Hence, both MLOs and feeder operators are important. This paper provides the maritime professionals, especially those involved in liner shipping, with an in-depth understanding of cascading and the status of liner network in Malaysia and Myanmar. Subsequently, the recommendations may assist in their strategic decision towards operating in a more cost-effective and efficient way. Bachelor of Science (Maritime Studies) 2019-12-27T08:57:16Z 2019-12-27T08:57:16Z 2019 Final Year Project (FYP) https://hdl.handle.net/10356/136556 en application/pdf Nanyang Technological University
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Science
Engineering::Maritime studies
spellingShingle Science
Engineering::Maritime studies
Kwek, Sherwin Ming Loong
Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
description The liner shipping environment is a highly completive environment with low freight rates and a narrow profit margin. Acquiring bigger vessels to gain Economies of Scale (EOS) through spreading of the fixed cost across more containers is one popular way that many shipowners adopt to keep operating cost low and remain competitive. Such actions led to rapid growth in container vessel size along the years. This created a cascading phenomenon where the bigger vessels are displacing smaller ones. Cascading also impacts the trade lanes where the newest and biggest vessels will be deployed on main trade lanes, displacing the current large ships. These displaced large ships will then be redeployed into secondary routes and eventually to the liner feeder service routes, displacing smaller vessels. Surplus tonnages that are older or too small will be scrapped. A three-part study was conducted to investigate the degree of the cascading phenomena in the South East Asian countries as well as to evaluate the current liner shipping network in these countries to determine if cascading will cause an end to the liner feeder services in South East Asia. The study was broken down according to country. Each work package consists of 2 countries namely Malaysia & Myanmar, Thailand & Indonesia and Vietnam & the Philippines. Collectively, the 3 packages will cover the South East Asian countries. The key area of this paper is on the political/legal, economic and technical aspect of the country, its shipping and port activities. It highlights both the macro and micro view when determining the degree of cascading experienced in each country and the current liner network system before recommending on possible strategies for Main Liner Operators (MLOs) and Feeder service operators. Finally, it will link the points up to determine if cascading and the current liner environment will cause the end of liner feeder network in Malaysia and Myanmar. From the primary and secondary research, it reflects that cascading is restrictive towards causing the end of liner feeder service network system in Malaysia and Myanmar. In fact, due to the various stages of the political, economic, and technical development experienced in each country, it shows that the hub and spoke system is an important aspect of the liner ecosystem in South East Asia. Hence, both MLOs and feeder operators are important. This paper provides the maritime professionals, especially those involved in liner shipping, with an in-depth understanding of cascading and the status of liner network in Malaysia and Myanmar. Subsequently, the recommendations may assist in their strategic decision towards operating in a more cost-effective and efficient way.
author2 -
author_facet -
Kwek, Sherwin Ming Loong
format Final Year Project
author Kwek, Sherwin Ming Loong
author_sort Kwek, Sherwin Ming Loong
title Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
title_short Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
title_full Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
title_fullStr Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
title_full_unstemmed Cascading effect in South East Asia and its impact on liner feeder services (Malaysia & Myanmar)
title_sort cascading effect in south east asia and its impact on liner feeder services (malaysia & myanmar)
publisher Nanyang Technological University
publishDate 2019
url https://hdl.handle.net/10356/136556
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