Question

Discuss the major trends and issues in ocean transportation and their impact in global supply chain operations. Substantiate your answer with referenced examples.

Answer 1

Ocean Transportation can be seen as the movement of ships on continuous and published schedules. All the routes are predetermined and thus the cost of these are relatively higher in comparison to other transportation modes. There are a varied size and type of ships and it requires a lot of time.

Let us consider that 20 pallets of Ferrero Rocher chocolate are ordered by Goodies Supermarket in Lagos, Nigeria to be replenished by Bestway Wholesalers in Middlesex, United Kingdom. In order to fulfil this order, Bestway uses the logistic services to Sea Freights forwarders to ensure the exporting of the required products. Because of the nature of the shipment, the vessel container shipment is selected by them to transport the freight. This can also be done by using air transportation which is quite time effective and more desirable as with the help of air transportation, the shipment can be landed to Lagos within 3-4 days. The similar shipment will need almost 1 month to reach Lagos using ocean transportation from Felixstowe port UK to Port Harcourt in Lagos. It is quite significant to take the consideration of the time factor in this transportation as the chocolates are perishable in nature.

           

The main issues which are involved in the ocean transportation are capacity, shortages, port congestion, and increased rates. As it has the lower freight cost, thus it is quite difficult for the ocean lines to be in business with having greater profitability. This type of transportation is quite good for the companies but the ocean liners have many difficulties in sustaining their business. The various issues which make the life of a liner more difficult are rising fuel costs, piracy, higher insurance costs, and pollution regulations