國際貨櫃航運之特殊櫃專案研究 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大. 立Master’s Thesis. ‧. ‧ 國. 學 sit. y. Nat. 國際貨櫃航運之特殊櫃專案研究 n. al. er. io. Global Shipping – Special Cargo Projects. Ch. engchi. i n U. v. Student: Sam Hsieh Advisor: Professor Chester. 中華民國一〇四年五月 May 2015.

(2) 國際貨櫃航運之特殊櫃專案研究 Global Shipping – Special Cargo Projects. 研究生：謝定寰. Student: Sam Hsieh. 指導教授：何小台. Advisor: Chester Ho. 國立政治大學. 學. ‧ 國. 立. 政治大. ‧. 商學院國際經營管理英語碩士學位學程碩士論文. er. io. sit. y. Nat. A Thesis. n. a to International MBA Program Submitted iv l C n U NationalhChengchi University engchi. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一〇四年五月 May 2015.

(3) Abstract Global Shipping – Special Cargo Projects By Sam Hsieh Due to the market situation, the shipping industry is now facing a huge challenge of unbalance in supply and demand sides. After 2006, more and more shipping companies start to build the vessels with large capacity because they think the bigger the better. With the new technology of. 治政 efficient dynamics, more fuel cost can be saved even with 大the huge size of the vessel. However, 立 with the impact of financial tsunami, the demand for cargo shipping is much lower than the ‧ 國. 學. capacity supply from the carriers. Besides, the ocean freights are hardly to increase because of. ‧. serious competitive between carriers. Hence, the only way to raise the revenue is to cherry pick the cargo and find the high revenue products.. y. Nat. er. io. sit. Besides, according to the research, 2015 is still a tough year for the shipping industry because of the low freight rates in general cargo and over supply for the space capacity. Therefore, I plan. n. al. Ch. i n U. v. to create a project team to focus on special equipment transportation only in my company,. engchi. which can help the clients with the packing, inland haulage, customs declaration, and ocean shipping tills the final destination. Our target for example, out of gauge machines, flight simulators, and factory facilities…those over size cargos. I believe customers will care more about the safety while shipping than the price, so the profit will be higher than the standard size cargo. Besides, with fewer competitors in the marketplace, we can create our irreplaceable value in such niche market.. i.

(4) TABLE OF CONTENTS 1. Introduction .......................................................................................................................... 1. 1.1. What is Container ............................................................................................................ 1. 1.2. About Standard Container ............................................................................................... 1. 政治大. 1.3. About Special Container .................................................................................................. 2. 立. 2. Market Situation ................................................................................................................... 5. ‧ 國. 學. 2.1. Demand Side in 2012 ...................................................................................................... 5. ‧. sit. y. Nat. 2.2. Supply Side in 2012 ......................................................................................................... 6. er. io. 2.3. Demand Side in 2013 ...................................................................................................... 7. al. n. v i n Ch 2.4. Supply Side in 2013 ......................................................................................................... 8 engchi U 2.5. Demand Side in 2014 ...................................................................................................... 9. 2.6. Supply Side in 2014 ....................................................................................................... 11. 2.7. Market Summary ........................................................................................................... 12. 3. Motivation ........................................................................................................................... 13. 3.1. Operating Margin of Main Carriers ............................................................................... 13. ii.

(5) 3.2. The Challenge of My Company .................................................................................... 14. 4. About Evergreen ................................................................................................................. 15. 5. Special Cargo Division ....................................................................................................... 17. 5.1. The Organization of Special Cargo Department............................................................ 17. 政治大. 5.2. Our Service for Special Cargo ....................................................................................... 18. 立. ‧ 國. 學. 6. Market’s Demand for Special Cargo ................................................................................ 19. 6.1. The Organization of Special Cargo Department............................................................ 20. ‧. Nat. er. io. sit. y. 7. Special Equipment Introduction ....................................................................................... 22. 7.1. In Gauge ........................................................................................................................ 22. n. al. Ch. engchi. i n U. v. 7.2. Out of Gauge ................................................................................................................. 23. 7.3. Break Bulk ..................................................................................................................... 23. 7.4. Flat Rack Container ....................................................................................................... 24. 7.5. Open Top Container ....................................................................................................... 25. 8. The procedure of Special Cargo Transportation ............................................................. 27. iii.

(6) 9. Case Study ........................................................................................................................... 28. 10. Financial Analysis ............................................................................................................. 30. 10.1. Projected Profit and Loss ............................................................................................. 31. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. iv. i n U. v.

(7) List of Figures and Tables Figure 1: 20-foot standard size container ................................................................................... 2 Figure 2: 40-foot standard size container ................................................................................... 2 Figure 3: 40-foot high cube reefer container .............................................................................. 3 Figure 4: 20-foot flat rack collapsible container ........................................................................ 4. 政治大. Figure 5: ISO tank container ...................................................................................................... 4. 立. Figure 6: Shanghai Containerized Freight Index 2010-2012 ..................................................... 6. ‧ 國. 學. Figure 7: Container Supply Growth 2012 .................................................................................. 7. ‧. Figure 8: Shanghai Containerized Freight Index 2013-2014 ..................................................... 8. y. Nat. er. io. sit. Figure 9: Container Supply Growth 2013 .................................................................................. 9 Figure 10: Shanghai Containerized Freight Index 2014-2015 ................................................. 10. n. al. Ch. engchi. i n U. v. Figure 11: Container supply growth 2014 ................................................................................ 11 Figure 12: Average operating margin of main carriers ............................................................. 13 Figure 13: Evergreen logo ........................................................................................................ 16 Figure 14: Shipping vessel of Evergreen .................................................................................. 16 Figure 15: The organization of new special cargo department ................................................. 18 Figure 16: Chinese exports in growth and value 2013-2015 .................................................... 19 Figure 17: Cargo flow of over size machinery around the world (1) ....................................... 20. v.

(8) Figure 18: Cargo flow of over size machinery around the world (2) ....................................... 21. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vi. i n U. v.

(9) 1. Introduction Before introducing special container, let’s learn from the beginning. What is “container”?. 1.1.. What is Container. An intermodal container is a standardized reusable steel box. Intermodal containers are used to store and move materials and products efficiently and securely in the global containerized intermodal freight transport system. "Intermodal" indicates that the container can be used. 政治大. across various modes of transport, (from ship to rail to truck) without unloading and reloading. 立. its contents. Lengths of containers, which each have a unique ISO 6346 reporting mark. There. ‧. About Standard Container. y. Nat. 1.2.. ‧ 國. cargoes.. 學. are about 17 million intermodal containers in the world of varying types to suit different. er. io. sit. The standardized steel shipping container has its origins in the 1950s, when commercial shipping operators and the US military started developing units such as the 6- by 6- by 6-foot. n. al. Ch. i n U. v. steel-clad container express box used for military shipments on commercial vessels. The. engchi. International Maritime Organization published ISO standards for containers between 1968 and 1970. These standards allow for more consistent loading, transporting, and unloading of goods in ports throughout the world, thus saving time and resources.. A typical container has doors fitted at one end and is made of corrugated weathering steel with a plywood floor. Containers are 8 feet (2.44 m) wide by 8 feet 6 in (2.59 m) high, and either a nominal 20-foot (6.1 m) or 40-foot (12.19 m) long. Taller "hi-cube" or "high-cube" units measuring 9 feet 6 inches (2.90 m) high are common in most areas, especially those developed countries. The United States and Canada often use longer units at 45 feet (13.72 m) to transport. 1.

(10) woods.. 學. ‧ 國. 立. 政治大. Figure 1: 20-foot standard size container. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 2: 40-foot standard size container. 1.3.. About Special Container. According to the research, there are more than 80% goods are traded by sea. For example,. 2.

(11) clothes, foods, machines, vehicles, all kinds of materials, etc. Not only because of the loading quantity, but the efficiency and cost saving. Most of the goods can be loaded in a standard container, but for commodity like fruits, vegetables, machinery with over dimension, or special equipment, those things cannot use or fit in standard container. We need to find some other solution to carry. That’s why here comes special container. General speaking, special containers include reefer container, open top container, flat rack container and tank container. Reefer container is made with integral refrigeration unit, which can help to control inside of the. 政治大. container remain at a designated temperature. The shape of open top container looks just like. 立. standard container, but without solid roof. Flat rack containers are especially suitable for heavy. ‧ 國. 學. loads and cargo that needs loading from the top or sides, such as pipes and machinery. You will find collapsible containers and non-collapsible containers with or without walls. Tank container. ‧. is for the transport of liquids, gases and powder as bulk cargo.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. Figure 3: 40-foot high cube reefer container. 3. v.

(12) 學. ‧ 國. 立. 政治大. Figure 4: 20-foot flat rack collapsible container. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. Figure 5: ISO tank container. 4. i n U. v.

(13) 2. Market Situation What we all seem to want is stable and sustainable economic growth within which to build our business, but what we are getting at the moment is recurrent minor shocks that shake our confidence and prohibit us from moving forward fast. After 2006, more and more shipping companies start to build the. ship with large capacity because the demand for the space of shipping industry is rapidly increased, especially the space of container. However, with the suddenly impact of financial tsunami in 2008, the demand for cargo shipping crushed, also the ocean freights went down due. 治政 to the irrational price war. Until now, most of the shipping 大companies are still hard to gain profit. 立 Let’s have a look for the market situation in the past three years. ‧ 國. 學. 2.1.. Demand Side in 2012. ‧. James Hatfield may have had container line operators in mind when writing: “Waiting for the. sit. y. Nat. one – the day that never comes – when you stand up and feel the warmth – but the sunshine. n. al. er. io. never comes”. As it appears to be a spot-on comment to the poor peak season in container. i n U. v. shipping 2012, reflecting very illustratively the positive sentiment in global economics and. Ch. engchi. container shipping that turned sour over the summer following a very strong start of the year. There is room for some optimism in the container ship business, as witnessed by the number of loaded containers going into the ports on the US West Coast. Here, demand increased by 1.7% during 2012, more than making up for the fall in demand in 2011. This uplifting result was achieved in spite of a strike, which heavily affected imports into the port of Los Angeles in November and December. As a result of this strike, the containers expected to arrive in late November were delivered in December, explaining much of the discrepancy between the two months. Estimates from Container Trade Statistics show that the full-year numbers for 2012 on the Asia-Europe trades could fall by 500,000 TEU as compared to 2011. This is very much due. 5.

(14) to weak demand from Europe as such and Southern Europe in particular.. 立. 政治大. ‧. ‧ 國. 學 y. Nat. er. io. sit. Figure 6: Shanghai Containerized Freight Index 2010-2012. Supply Side in 2012 a. n. iv l C n The container ship fleet has grown by now and remains on course for a full year fleet h5.9% e nuntil gchi U 2.2.. expansion of 7.2%. Container ship demolition has stayed very strong throughout the year, up from the very low level at 77,000 TEU in 2011 to touch 300,000 TEU this year. It is equally important that the demolition of larger sizes has started, with 27% of the recycled tonnage having a capacity exceeding 3,000 TEU. The elevated recycling activity, as compared to the steady pace of new deliveries, has meant that the number of vessels in the fleet has actually gone down during the past two months. Meanwhile, 15 new contracts for +9,000 TEU vessels and 7 for medium sized vessels were done. This made the order book stand still at 3.5 million TEU (22% of active fleet).. 6.

(15) 政治大. 立. ‧ 國. 學. Nat. y. Demand Side in 2013. sit. 2.3.. ‧. Figure 7: Container Supply Growth 2012. n. al. er. io. On a global scale, containerized export data from CTS, shows that activity improved in May. i n U. v. following a weak start to 2013. Since then, the pace has picked up, and November and. Ch. engchi. December saw 5-7% growth rates from same months of last year. As total imports into Europe have been growing even more strongly, it does explain why traceable freight rates from Shanghai to Europe went up sharply in October and December. In the meantime, freight rates on US bound boxes have been very steady. As in the past years, demand has grown quickest on the intra-Asia trades. This trend continues, despite the lowering of the IMF’s GDP-growth expectations for Emerging and developing economies. The US economy is the key driver for global growth in container shipping. In the Macro Economic section, it was mentioned that the US economy was going through a positive development. To look at bit deeper into that, traffic development in US ports is very interesting.. 7.

(16) The inbound loaded traffic on the US Atlantic coast remained almost unchanged this December compared to last year. Unfortunately, ports in the US Gulf were not so lucky. Compared to December last year, the US Gulf Coast ports saw a drop in inbound loaded traffic of more than 5%.. 立. 政治大. ‧. ‧ 國. 學 er. io. sit. y. Nat. al. v. n. Figure 8: Shanghai Containerized Freight Index 2013-2014. 2.4. Supply Side in 2013. Ch. engchi. i n U. The pace of new-building orders placed for box ships in 2013 has been strong too, with 1.69 million TEU contracted (2012: 0.4 million TEU). The orders are following the same pattern as seen in recent years. 52% of the new capacity contracted during 2013 is for Ultra Large Containerships (ULCS), with 35% placed in the 8,000-9,999 TEU range. This leaves 13% for sub- 8,000 TEU contracts. The fleet is being heavily skewed towards the bigger sizes, as investors seek to lower unit costs, reap the benefits of economies of scale and by that, improve competitiveness. The future is set for slow steaming and larger volumes on each ship, but. 8.

(17) profitability for the operators will depend on utilization. With a charter market in the respirator, it is important to notice that all of new orders for ULCSs come with a charter party attached. The orderbook data in total mirrors the aforementioned trend, with 81% of the capacity of the orderbook being in the Post-Panamax 8,000 TEU size. The inflow of new tonnage in 2013 remains on target to become the second largest on record, but most importantly, demolition activity is already at all-time high level, with more to come. Fleet expansion around 5.9% is set to become the new standard level of supply growth.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 9: Container Supply Growth 2013. 2.5. Demand Side in 2014 The peak season of the year also saw the greatest volatility of the year. Following the steady freight rate development on the Far East to Europe route up until September. Demand from Europe appears to be more of a restocking issue than a 100% consumer-driven revival.. 9.

(18) Regardless of its origin, volume growth has been impressive. According to CTS, European box imports were up by 8% y-o-y in the first nine months of 2014. Since Asian imports from Europe went up by just 0.2% in the same period, the imbalance between front haul and backhaul has widened again, reversing the recent trend of stronger backhaul growth. Asian exports to all US destinations have grown by 5.6% in total. In spite of the conflict, US West Coast ports handled an increasing number of loaded inbound containers in 2014 (+3.8%). The trade in 2014 was much stronger though on the US East Coast (+10.6%), with strong numbers seen throughout the. 政治大. year. The West Coast congestion did not relocate volumes from West to East much. The stable. 立. freight rate trend in the first part of 2014 on the Far East to Europe trading lane collapsed when. ‧ 國. 學. the peak season got underway.. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 10: Shanghai Containerized Freight Index 2014-2015. 10.

(19) 2.6. Supply Side in 2014 Now leads to an increase in the overall supply growth estimate, as the demolition amount is unlikely to exceed 400,000 TEU, thus bringing the net change to the fleet stock to a three-year high at 6.2%. One hundred and eighty six new ships have been delivered, giving us the second largest delivery year on record in 2014; second only to the bumper year of 2008, that saw 1.5 million TEU introduced. New contracting for the year to date is now at 853,000 TEU, the aggressive new ordering of 29. 政治大. ships in September is now behind us, with only five ships of 1,800-1,900 TEU being ordered. 立. during October and November. The total fleet size passed the 18 million TEU-mark in. ‧. ‧ 國. io. sit. y. Nat. n. al. er. time.. 學. November and is now heading for a 19 million TEU-mark in approximately eleven months’. Ch. engchi. i n U. v. Figure 11: Container supply growth 2014. 11.

(20) 2.7. Market Summary According to above market situation from 2012-2014, you can find out the demand side was going up and down sharply because of the weak economics in Europe and unstable needed in the US. Also China- the biggest market in Asia was facing the difficulty to keep at least 8% of growth rate. Even the supply side is increasing every year. Without the strong demand, the carriers are still hard to gain profit.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 12. i n U. v.

(21) 3. Motivation We used to say that the shipping industry is a recycle index. It goes up and down in about every 5 years. However, after the Financial Tsunami, every industry collapsed, and so did the shipping companies. If today the order for products or materials goes down, shipping company will face the serious impact. Also, the price war between the competitors will damage the profits. Besides, the clients nowadays have more and more opportunity to choose the shipping company, not just the price, but also the service. Furthermore, fuel cost and port. 治政 charge will directly decide a shipping company can make 大money or not. 立 ‧. ‧ 國. 學. 3.1. Operating Margin of Main Carriers. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 12: Average operating margin of main carriers Figure shows the average operating margin of main carriers from 2009 to 2014. You can easily find out except 2010, most of the margins of main carriers are negative. Freight rates. 13.

(22) were lower across most of the main trade lanes and capacity pressure continued to affect the liner trades. Some of the carriers started to improved the margin in 2014, not because of the high revenue, most of their profits achieved from cost efficiencies, as well as from lower bunker prices.. 3.2. The Challenge of My Company I now work for Evergreen Marine Corporation, a 50-year old shipping company, and the. 政治大 company for almost 10 years. I have been through Rating Department, Customer Service 立 largest shipping company in Taiwan, has also face the same problem. I started to work in this. ‧ 國. 學. Department, Sales Department and now in Marketing Programming Department. I saw my company growth and decline before and after the Financial Tsunami. The margin of the. ‧. company keeps shrinking because of over supply and freight rates keep going down in the. sit. y. Nat. main market. Besides, even the company try to stop the service which gain no profit and. io. al. er. retrench the expense, the result is still disappointed. Thus, I came out an idea that I can utilize. n. the resource that my company had and create a new business called Special Cargo Project to. Ch. help my company to earn more profits.. engchi. 14. i n U. v.

(23) 4. About Evergreen Evergreen Group began with the establishment of Evergreen Marine Corporation (EMC) by Dr. Yung-Fa Chang on 1 September 1968. From humble beginnings operating just one secondhand general cargo vessel, Evergreen has grown throughout its history to gain many outstanding achievements. It is now operates the fourth largest container fleet in the world, with over 190 ships by capacity of approximately 850,000 TEU. Evergreen launched its first full container service in 1975, connecting the Far East and the US. 治政 East Coast. In 1984, Evergreen made another pioneering 大move with the launch of a two-way 立 Round-the-World container service. As a result of this innovative move, Evergreen became the ‧ 國. 學. world's largest container shipping company in 1985.. ‧. In an initiative designed so as customers around the world could better identify with the companies' network of services, EMC and sister shipping companies Evergreen Marine (UK). y. Nat. er. io. sit. Ltd, Italia Marittima SpA, Evergreen Marine (Hong Kong) Ltd and Evergreen Marine (Singapore) Pte Ltd adopted the unified common trading name 'Evergreen Line' in 2007. Since. n. al. Ch. i n U. v. then, Evergreen Line has actively cooperated with strategic partners through alliances, joint. engchi. services and slot swap arrangements to provide a wider range of service options to its customers. Evergreen is committed to serving world trade by providing the most efficient transportation services. To help achieve this goal and to strengthen its operational efficiency, Evergreen has set up transshipment hubs in key geographic locations within its service network. Examples of these projects include container terminals in Kaohsiung, Taipei Harbor in Taiwan and Colon in Panama. These investments enable Evergreen to significantly increase the cargo handling efficiency at the terminals and reduce operation costs.. 15.

(24) In 2014, Evergreen made a tremendous decision. Evergreen Line and the four members of the CKYH Alliance have agreed in principle to form a new alliance that will share ships on trades between Asia and North Europe and the Mediterranean. The CKYHE alliance will comprise Cosco, “K” Line, Yang Ming, Hanjin and Evergeen. It plans to begin operations in mid-April with six joint services between Asia and North Europe and four loops dedicated to the Asia-Mediterranean route.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Figure 13: Evergreen logo. Ch. engchi. i n U. Figure 14: Shipping vessel of Evergreen 16. v.

(25) 5. Special Cargo Division There are four major business divisions in my company, which divided by the five continents. They are East Bound Division, West Bound Division, Middle East Division and Intra Asia Division. Each division sets up their own target ocean freights base on the market situation and also responsible for the space arrangement, which include the general cargo and the special cargo. However, most of the time the sales teams rather provide competitive rates for general cargo than special cargo, because it will spend a lot of time and energy to investigate the special. 治政 goods before receiving. For example, we need to know the 大dimension of the goods, we need to 立 consider if the goods is dangerous, we need to make sure the goods can be well treated during ‧ 國. 學. the sailing time, etc. Besides, it’s hard to get the support from the client due to lots of. ‧. competitors are also interested. However, with more complicated works to do, will comes the huge profits if we success.. sit. y. Nat. n. al. er. io. 5.1. The Organization of Special Cargo Department. i n U. v. Figure shows the organization chart about the new special cargo department. There will be a. Ch. engchi. senior vice president who will be the leader to lead the whole department to achieve the goal. At his bottom, we will have one junior vice president and two managers to lead the sales team with Asia focus and Non Asia focus to follow the instruction. Our sales in each segment will need to study all the knowledge about special cargo and learn the skills to convince the client to choose Evergreen as the carrier. Meanwhile, the whole department also needs to coordinate with other departments to ensure the safety and efficiency during the transport.. 17.

(26) 政治大. 立. ‧ 國. 學. Figure 15: The organization of new special cargo department. ‧ sit. y. Nat. 5.2. Our Service for Special Cargo. io. al. er. • Expertise throughout the entire logistics process. n. • Customized solutions to the unique needs. Ch. • Door to door project management. engchi. i n U. • Fast response time • High quality special equipment (Flats and Open Tops) • On-line container tracing • Global Reach and Local Touch. 18. v.

(27) 6. Market’s Demand for Special Cargo Before talking about the market’s demand for special cargo, let’s first have the preview for the whole containerized shipping market situation in 2015. Container shipping demand is projected to grow 3-5% this year over 2014, but freight rates are expected to be on a slight decline, according to Lars Mikael Jensen, chief executive of Asia Pacific region at Maersk Line. On the supply side, growth is anticipated at 5-7%, putting demand and supply growth close to the same pace for the rest of this year and possibly into 2016 as well. Another information shows the. 治政 freight has left the erratic up and down movements behind 大 only to slide week after week. On 立 Friday April 10, 2015 the freight rate including ocean freight and surcharges was quoted at ‧ 國. 學. USD 466 per TEU for the Shanghai to Europe trading lane. This is the lowest on record since. ‧. the 2009. Moreover, The Chinese manufacturing sector has been facing serious headwinds in 2015 with new orders declining three month in a row for the first time ever.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 16: Chinese exports in growth and value 2013-2015. 19.

(28) 6.1. The Organization of Special Cargo Department The demand of special cargo in the international trading market becomes more and more popular, such as facilities moving for public infrastructure and mineral exploration, or the high value items like statues, sports cars, yachts that for exhibition or for sell, or the gigantic oil drilling equipment that cannot use standard container to handle. Below figures show the cargo flow of over sized machinery around the world. According to the internal research from my company in 2013, our market share of special cargo was only 0.3%.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 17: Cargo flow of over size machinery around the world (1). 20.

(29) 立. 政治大. ‧. ‧ 國. 學. Figure 18: Cargo flow of over size machinery around the world (2). n. er. io. sit. y. Nat. al. Ch. engchi. 21. i n U. v.

(30) 7. Special Equipment Introduction Basically special cargo is oversized cargo that does not fit into the standard dry and reefer containers. We have categorized the oversized cargo into three types: “In Gauge”, “Out of Gauge” and “Break Bulk”. Depending on the type of the cargo. Besides, the containers that we use to load above special type of cargos are called flat rack and open top.. 7.1. In Gauge. 政治大. In Gauge means that the dimensions of the special cargo are smaller than or equal to those of the. 立. container employed. This means In Gauge can be transported within the physical constraints of. ‧. ‧ 國. 學. our Open Top containers.. n. er. io. sit. y. Nat. al. Ch. engchi. 22. i n U. v.

(31) 7.2. Out of Gauge Out of Gauge is cargo which excess standard dimensions. It will still fit in one container unit, but is so large or heavy that special equipment is needed to accommodate the size and weight.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 7.3. Break Bulk. Ch. engchi. i n U. v. Break Bulk is non-containerized cargo that needs to be shipped on multiple Flat Rack containers put together to accommodate the very large size or weight.. 23.

(32) 立. 政治大. ‧. ‧ 國. 學 sit. y. Nat. 7.4. Flat Rack Container. io. er. Flat rack containers have only a floor and four corner posts with collapsible front and rear. al. panels. The panels are collapsible to act as flat beds for extremely heavy cargoes. Flat rack. n. v i n C mounted containers also have lashing rings locations, making it easy to secure the h e n gincmany hi U. cargo. Flat racks with a strong platform are suitable to carry heavy cargo and oversized cargo such as steel materials and machinery. The lack of sidewalls allows considerable flexibility in loading and is especially useful in transporting long cargoes. Oversized items such as yachts can be stowed on several flat rack containers set side-by-side together onboard vessels.. 24.

(33) 立. 政治大. ‧. ‧ 國. 學 er. io. sit. y. Nat 7.5. Open Top Container. al. n. v i n C hremovable canvasUor plastic sheets (tarpaulins) to prevent Open top containers are covered with engchi. water damage to the cargo. A removal door header is situated at the upper part of the container. door for simple cargo handling. The floor is made of the same material as a normal dry container. Open top containers are designed for cargoes that are to be handled with overhead cranes or high-masted fork-lift trucks such as light machinery, over-height cargo, etc.. 25.

(34) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 26. i n U. v.

(35) 8. The procedure of Special Cargo Transportation Transporting Special Cargo requires the highest amount of expertise in the market. Therefore, not just the sales team needs to learn the knowledge, but also the operators must know how to manage the safety when transporting the special cargo. For example, Break bulk cargo is usually stowed on flat racks and platforms. It is important to confirm that the break bulk cargo itself is properly secured onto the Flat rack or Platform prior loading on board. If additional lashing or tightening of existing lashing is required, this must be done by the terminal staff to. 治政 the vessels satisfaction. If not, vessel operator shall be advised 大 of situation and in any case such 立 shipment posing serious danger to vessels safety shall not be accepted for carriage. ‧ 國. 學. Next, I am going to briefly introduce what the sales team needs to do after we create the new. ‧. department. First, the sales team will try to look for the clients who might have special cargo need to export. Once the sales team gets the information, they will provide competitive rates. y. Nat. er. io. sit. base on the dimensions and check the space on the target vessel. If the client decides to choose Evergreen, we will first have the sales team to visit the client face to face and discuss the most. n. al. Ch. i n U. v. appropriate way to transport the cargo. Second, we will have our trucking company to help the. engchi. client to lash the cargo on the special equipment then send to the port for loading, the air chassis will also be provided if necessary. Third, we will provide professional broker for the Customs declaration and our sales team will monitor the cargo be loaded on board safety by the operator. Meanwhile, we also have the logistics department that can provide door-to-door service and release credit term to the client for they can turnover more easily. Besides, on-line container tracing system will help the client to monitor the cargo just by one clicked.. 27.

(36) 9. Case Study Our branch in Vancouver, Canada has received a special cargo requirement from Montreal to Taiwan in February. The commodity of this special cargo was flight compartment simulator for Eva Air. Although the consignee belongs to Evergreen Group, Evergreen Marine still need to offer best rates in the market as well as being able to leverage the greatest service to accommodate their customer. After several rounds discussion with carriers, Eva Air decided to leave the business to Evergreen Marine. Our sales in Vancouver first went to the factory and. 治政 decide which type of the special equipment was fitted, 大and then contacted the equipment 立 department to prepare enough containers for use. The shipper of this shipment was BNSF ‧ 國. 學. Logistics Inc., which helped to load the parts into standardized containers and lash the special. ‧. cargo on two flat rack containers. After that, all the cargos were trucked from Montreal to Vanterm Terminal, Vancouver. Our sales team in Vancouver started to monitor the process and. y. Nat. er. io. sit. keep updating the news to the client while trucking. When the cargos almost arrived at Vanterm Terminal, the sales checked with the operation department about the schedule of the vessel and. n. al. Ch. i n U. v. make sure the space was available for these cargos. When the vessel arrived at Vanterm. engchi. Terminal, the sales first contact with the surveyor company and asks for a report of inspection to make sure the cargos were good to go. After the cargos been loaded on the vessel safely, the sales contacted with the import department at destination and make sure everything will be treated well after the vessel arrived at discharging port. According to this case, the freight rate with the surcharge included is USD 11,050. Compare with standard cargo export from the same place, the freight rate with the surcharge included is USD 2,000. You can easily find out the huge difference between special cargo and standard. 28.

(37) cargo is USD 9,050 under the similar cost.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 29. i n U. v.

(38) 10. Financial Analysis In order to set up a Special Cargo team, we estimate to invest USD 100,000 as a start-up expense, which including employer training, customer visiting (entertainment), new business advertising and promotion and also the traveling expense to handling those international shipping cargos. Besides, we need to have a new meeting room to communicate and intergrade all relevant departments for each special case to ensure safety and secure on-time transportation for each special cargo. In the very first year, the said Special Cargo team will only be set up in. 治政 Taiwan headquarter to handle all worldwide business. However, 大 if our sale performs prior than 立 estimated volume and earn more revenue, we may also adjust the plan to set up more division in ‧ 國. 學. oversea office to catch up with the market trend.. sit. io. Advertisement. al. n Traveling Expense. USD 9,000. y. Nat. Entertainment. er. Training. ‧. Start-up Requirements. Ch. Other Expense. n U engchi. iv. 8,000 5,000 20,000 5,800 47,800. Total Start-up Expenses Assets Other Current Assets (office facility). 21,900. Long-term Assets. 30,300. Total Assets. 52,200 100,000. Total Requirements. 30.

(39) Other Current Assets (office facility). Units. Furniture (desk, chair). Depreciation/year. 5,000.00. 500.00. PC. 8. 15,000.00. 1,500.00. COPY MACHINE. 1. 800.00. 80.00. Telephone. 8. 1,000.00. 100.00. Trash can. 4. 100.00. 10.00. 21,900.00. 2,190.00. Long-term Assets. Units. Meeting room PROJECTOR. 立. Laptop. USD Depreciation/year. 1. 15,000.00. 1,500.00. 1. 300.00. 30.00. 8. 15,000.00. 1,500.00. 30,300.00. 3,030.00. 政治大. ‧ 國. 學. 10.1.. USD. Projected Profit and Loss. ‧. The following is the estimated yearly profit projection for 4 years since 2015. We plan to. Nat. sit. y. achieve our 1st year (2015) sales volume as USD 3,500,000 to get the net profit after tax as USD. n. al. er. io. 1,200,000. The start-up investment (USD 100,000) will be back in the very 1st year due to such. i n U. v. new business for special cargo is set up under existed company with original employer and. Ch. engchi. office facility. Also, we plan to spend more on training to strength our team with knowledgeable sense to provide the best service to our customers. Further, since it is our Evergreen’s first time to set up a special team for dealing such business, we plan to do more advertising and promoting comparing with future years. In 2nd Year (2016), our business will be steadily growth due to more and more customers are aware of our service for their special cargo transportation. However, we spend quite a big portion in ‘Traveling’ part due to our sales have to travel to worldwide terminal/yard to ensure the safety and on-time delivery. Hence, in 2017, we plan to open a division of such special cargo team in New York to take care of all special cargo business in North and South America. Hence the ‘Travel expense’ may drop from 6% to 3.2% but the 31.

(40) training expense may increase due to new member’s joining. In year 4 (2018), we plan to open another division in London to be responsible for all special cargo affairs in Europe area. Not only the traveling expenses can be decreased and saved but also provide the better and customized service to our worldwide customer to meet their require and local customs regulations. At the same time, the training expense in 2018 will also remain higher ratio due to more new members’ join.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. ＊ COGS(Cost of goods sold): Shipping cost (fuel, transit charge, port calling charge…) ＊ Equipment: chassis, lashing charges… ＊ Depreciation: We assume all depreciable assets with 10 years of use, so the depreciation per year is 10% of properties' value = USD 21,900*10%=USD 2,190. ＊ Income Taxes: Corporate income tax rate is 17% if the annual taxable income (net profit before tax) is more than NT$120,000 (USD 4,000).. 32.

(41) Reference 【1】 BIMCO – The world’s largest international shipping association https://www.bimco.org/About/About_BIMCO.aspx. 【2】 Wikipedia – Intermodal container http://en.wikipedia.org/wiki/Intermodal_container. 政治大. 立. 【3】 Evergreen Marine Corporation. 【4】 Alphaliner – The worldwide reference in liner shipping. Nat. sit. n. al. er. io 【5】 Maersk Line. y. http://www.alphaliner.com/. ‧. ‧ 國. 學. http://www.evergreen-marine.com/. Ch. http://www.maerskline.com/. engchi. 【6】 CMA CGM https://www.cma-cgm.com/. 【7】上海航運交易所指數 http://www.chineseshipping.com.cn/. 33. i n U. v.

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