Analysis of vulnerabilities in maritime supply chains

This paper aims to analyze the different concepts of “vulnerability” used in maritime supply chains, and to develop a novel framework with supporting models to identify and analyze the relevant vulnerabilities in the chains. A real case of the Maersk shipping line in its Asia-Europe route is studied to demonstrate the applicability of the proposed framework. We find that the investigated network has stronger robustness against random failures than that when facing deliberate attacks. Furthermore, to identify vulnerable nodes (i.e. ports) of the network, two different types of analysis are undertaken through a multi-centrality model and a robustness analysis model, respectively. Consequently, the vulnerabilities estimated through robustness analysis can ascertain those by the classical centrality methods when they appear on both analysis results. More importantly, the similarity between the two outcomes can help gain more confidence on the accuracy in terms of the identification of the vulnerabilities in the system, while the difference (if any) such as those identified by the robustness analysis but not by the centrality analysis (or vice versa) can trigger a further investigation to find the comprehensive vulnerable nodes against different threats/hazards. It will aid rational decision on design and operation of resilient and robust maritime supply chains. © 2017 Elsevier Lt

Transport vulnerabilities and critical industries: experiences from a Finnish stevedore strike

Transport system is one of the critical systems in all societies. Despite growing interest towards supply chain vulnerabilities and the meaning of critical infrastructures to societies, analysis on vulnerabilities related to maritime transports in a security of supply context has not gained much interest. However, any failure in transports can have very disruptive consequences not only to companies’ supply chains but also to national supply security and daily life of people. With this paper, we contribute to analysis on mitigation strategies of critical industries towards transport disruptions. Our case study concentrates on impacts of a port closure due to a strike in Finland in 2010 and companies’ strategies to manage their operations during the strike, and we draw conclusions to the general structure of mitigation strategies towards logistic vulnerability.</p

Supply Chain Disruption Costs Study in International Containerised Maritime Transportation

The global economy relies highly on international trade, and the international maritime transport system acts as the lifeblood carrying and transporting materials and goods globally, realizing the economy globalization in an effective and efficient way. However, globalization increases the interdependence and complexity of global supply chains and drives it to be more vulnerable to disruptions. Meanwhile, the international marine transport system is a complex and intertwined system exposed to high risks and decreased safety due to its very accessibility and operational flexibility. Thereby, global supply chains integrated with international maritime transportation systems are inherently vulnerable to various disruptions. Studies of supply chain disruptions particularly quantifying transport related disruption costs are becoming increasingly important. However, research on maritime transport related supply chain disruptions, in particular, quantifying its disruption costs is under-represented in the transport literature, due largely to the features of supply chain disruptions, but also because of the complexity of maritime related supply chains. Current research in transportation has tended to concentrate on shippers’ transport mode choice and port selection. In the context of a global market, however, the behaviour of maritime containerised shippers has to be viewed as a complex decision and an integral element of the supply chain management strategy. Those shippers’ transportation choice decisions should be emphasized and studied to reveal their behaviour changes between normal operations and disruption circumstance. This research adds to the paucity work on investigating the maritime transport related supply chain disruptions and quantifying its disruption costs based on shippers’ maritime transportation choice behaviour. It presents the results of a microanalysis of freight transport choice decisions in an international containerised maritime transport chain context. The Latent Class Model (LCM) is applied to identify the key service attributes and its preference heterogeneity in maritime transportation and to estimate the marginal values for the quality of maritime transport service with and without a disruption, simultaneously, quantifying the disruption costs through comparing each attribute’s marginal value difference between normal and disruption operations. The Seemingly Unrelated Regression model (SURE) is utilized to explore the sources influencing shippers’ preference heterogeneities. In doing so, we are able to gain an understanding as to where and how much should be invested in order to facilitate recovery in the case of a disruption based on the view of the maritime participants’ perspectives. The research results confirm freight rate, transit time, reliability, damage rate, and frequency as the key service attributes influencing shippers’ transport choice. They also reveal shippers’ VOT increase by more than four-times, VOR nearly double, and VOD increase about twenty percent if a disruption takes place, and identify shippers’ transport decisions vary with its product, shipment, company and supply chain characteristics no matter with or without a disruption. This research quantifies the costs of supply chain disruption in containerised maritime transport context for the first time, and its results provide useful industrial implications for maritime transport chain related parties

Finnish Critical Industries, Maritime Transport Vulnerabilities and societal Implications

Maritime transports are very essential for Finland as over 80% of the foreign trade in the country is seaborne and possibilities to carry out these transports by are limited. Any disruption in maritime transports has negative consequences to many sectors in the Finnish economy. Maritime transport thus represents critical infrastructure for Finland. This report focuses on the importance of maritime transports on security of supply in Finland and for the so called critical industries in particular. The report summarizes the results of the Work Package 2 of the research project STOCA – “Study of cargo flows in the Gulf of Finland in emergency situations”. The aim of the research was to analyze the cargo flows and infrastructure that are vital for maintaining security of supply in Finland, as well as the consequences of disruptions in the maritime traffic for the Finnish critical industries and for the Finnish society. In the report we give a presentation of the infrastructure and transport routes which are critical for maintaining security of supply in Finland. We discuss import dependency of the critical industries, and the importance of the Gulf of Finland ports for Finland. We assess vulnerabilities associated with the critical material flows of the critical industries, and possibilities for alternative routings in case either one or several of the ports in Finland would be closed. As a concrete example of a transport disruption we analyze the consequences of the Finnish stevedore strike at public ports (4.3.–19.3.2010). The strike stopped approximately 80% of the Finnish foreign trade. As a result of the strike Finnish companies could not export their products and/or import raw materials, components and spare parts, or other essential supplies. We carried out personal interviews with representatives of the companies in Finnish critical industries to find out about the problems caused by the strike, how companies carried out they transports and how they managed to continue their operations during the strike. Discussions with the representatives of the companies gave us very practical insights about companies’ preparedness towards transport disruptions in general. Companies in the modern world are very vulnerable to transport disruptions because companies regardless of industries have tried to improve their performance by optimizing their resources and e.g. by reducing their inventory levels. At the same time they have become more and more dependent on continuous transports. Most companies involved in foreign trade have global operations and global supply chains, so any disruption anywhere in the world can have an impact on the operations of the company causing considerable financial loss. The volcanic eruption in Iceland in April 2010 stopping air traffic in the whole Northern Europe and most recently the earth quake causing a tsunami in Japan in March 2011 are examples of severe disruptions causing considerable negative impacts to companies’ supply chains. Even though the Finnish stevedore strike was a minor disruption compared to the natural catastrophes mentioned above, it showed the companies’ vulnerability to transport disruptions very concretely. The Finnish stevedore strike gave a concrete learning experience of the importance of preventive planning for all Finnish companies: it made them re-think their practical preparedness towards transport risks and how they can continue with their daily operations despite the problems. Many companies realized they need to adapt their long-term countermeasures against transport disruptions. During the strike companies did various actions to secure their supply chains. The companies raised their inventory levels before the strike began, they re-scheduled or postponed their deliveries, shifted customer orders between production plants among their company’s production network or in the extreme case bought finished products from their competitor to fulfil their customers’ order. Our results also show that possibilities to prepare against transport disruptions differ between industries. The Finnish society as a whole is very dependent on imports of energy, various raw materials and other supplies needed by the different industries. For many of the Finnish companies in the export industries and e.g. in energy production maritime transport is the only transport mode the companies can use due to large volumes of materials transported or due to other characteristics of the goods. Therefore maritime transport cannot be replaced by any other transport mode. In addition, a significant amount of transports are concentrated in certain ports. From a security of supply perspective attention should be paid to finding ways to decrease import dependency and ensuring that companies in the critical industries can ensure the continuity of their operations.Siirretty Doriast

Paving the way toward autonomous shipping development for European Waters – The AUTOSHIP project

New developments in maritime industry include the design and operation of autonomous ships. The AUTOSHIP project is one initiative promoting the use of autonomous ships in European waters focusing on two specific use cases, a Short Sea Shipping (SSS) cargo vessel and an Inland Waterways (IWW) barge. The AUTOSHIP objectives include thorough regulatory, societal, financial, safety and security analyses for the two investigated use cases as well as the development of a novel framework and methods for the design of autonomous vessels. This objective is achieved with the support of a number of activities, including supply chain, regulatory, risk and gaps analyses. Some results and findings from these activities are presented in this paper. The results demonstrate that the supply chain analysis is important to understand the complex relationships between different partners and phases for the effective design of maritime autonomous systems. Furthermore, a number of regulatory gaps needs to be addressed for the wider adoption of the AUTOSHIP use cases. There is a number of essential hazards associated with each of the two use cases; measures to mitigate these hazards are presented