The Essentials of Supply Chain Management: New Business Concepts and Applications by Min Hokey

Author:Min, Hokey
Language: eng
Format: epub
Published: 2015-06-08T20:01:14.614000+00:00

Despite numerous merits, water carriers are not without their drawbacks. Those drawbacks include the substantial involvement of federal, state, and local governments in promoting and subsidizing water carriers; the dependence of inland waterways on locks and dams; the influence of weather (especially winter freezes) on some inland waterways; and the increased environmental concerns over dredged materials extracted from inland waterways (Stephenson, 1987; Wood and Johnson, 1996). In particular, more than 50% of the locks and dams operated by the U.S. Army Corps of Engineers are over 50 years old and reaching the end of their design lives (U.S. Army Corps of Engineers, 2000). Therefore, without sizable investment in the improvement and upgrade of water transportation infrastructure, inland waterways may cause severe congestion at locks and dams and consequently offset the advantages of water transportation. A lack of government funds to maintain and upgrade water transportation infrastructure may also lead to higher waterway user fees and the subsequent increase in water carrier costs. Another challenge of water carriers is the globalization of business activities that require the increasing use of ocean carriers (oceangoing ships) under multiple nations’ jurisdictions. Typical services offered by ocean carriers are liner and charter services (WCL Consulting, 2006):

• Liner services

• Regularly scheduled services between major ports.

• Typical port calls of 1–3 days to unload imports and load exports using shore-based or on-board equipment (e.g., cranes) in a 24-hour per day operation.

• Charter services

• Vessels chartered/leased by importers with shipload quantities.

• Lower overall freight costs and greater control over scheduling.

• Charter agreements (charter parties/fixtures) can be time based (e.g., in months) or voyage based.

• May include crew and equipment or vessel only (bareboat charter).

• Also known as “tramp” steamers (because they operate on irregular schedules and go anywhere the cargo is available).

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