The port of New York and New Jersey in the East Coast of United States is the third largest port in the USA in terms of the tones it handles per year. Thus, the port handles approximately seven hundred thousand cars and over three million twenty foot equivalent units of containers every year. In addition, it is considered to be the busiest in terms of international and overall passenger flights as well as air freight flights. The port has foreign-trade zones called FTZ and FTZ 1 towards the New York side of the port and FTZ 49 towards the New Jersey side. It encompasses an area radius of forty kilometers around the Statue of Liberty with 386 km of shipping channels equipped with anchorage and other port facilities. Alderton (2005, p.32) claimed that its channels have been deepened from their natural depth on several occasions to accommodate the large vessels that enter the harbor. The ship traffic in this port coupled with a PCBs blanket underneath the ports soil has raised environmental concerns.
Nearly 60 percent of all international U.S. shipments move by water transportation (Dinwoodie et al. 2012). To date, the shipping industry has been studied on a business approach where macro and micro economic aspects that affect the industry have taken the center stage. The study of this industry has rarely been on strategy and management issues. Parnaby argues that no generic or specific process models in the shipping industry can be likened to the field of manufacturing. He also notes that a system approach is recommended for this industry as many companies have successfully employed this strategy. Dinwoodie et al. (2012, p.125), say this approach should follow and understand the document, moreover simplify and optimize approach.
Therefore, the article's primary aim is to create a model that supports a case-based approach in order to solve the problem without reinventing the wheel. Here, we will identify the key processes that realize an optimum solution. This article will employ the input-output process developed by Parnaby in 1979. First is the identification of the functional areas to be optimized and simplified. These are the processes that define the flow of the shipment industry.
Initially thought of a system and the business (the port) have to be put in mind in order to eliminate some of the complex aspects of the port. According to Sciutto, (1998), system modeling employs analysis, innovation, synthesis, and implementation. Brooks, Button & Nijkamp (2002 p.27) came up with the following rule of system modeling such as relating process development to business strategy; thus this involves the right people in the right perspective. It endeavors task forces for a clear, brief and essential accountability to accomplish it. Do not confound endless re-organization with efficient re-engineering. One should also understand how the process of changes affects people; they should always focus on successful implementation, and ensure task forces to leave effective monitoring systems in place.
By the use of Parnaby input-output analysis in the dry and liquid bulk sectors of the port of New York and New Jersey, the above theories were put into work. The dry cargo and tanker industry are affected both in the short and the long run by freight charges (Comtois & Slack 2007). This affects the ship supply as well as the scrap metal markets that directly influence on the shipping industry. There have been done a lot of studies by various experts all over the world to determine ways of reducing shipment cost (Tovar & Sergio 2003). These studies have been focused on new technologies and their overall cost reduction in terms of speed and size among other factors such as shipping routes. Other studies have been conducted on the structure of the shipment companies and ports, but all of which to some extent gave a blind eye to the external factors affecting the industry.
The input-output analysis, however, looks at this issue as a whole. For a shipping company, the input stage comprises those processes that are fundamental to function at the strategic level. On this level, actions that affect the current and future operations of the company, its competence and effectiveness, and, therefore, its competitiveness take place. At the output stage, the procedure that takes place at the operational level is integrated (Olivella 2000).
The input stage has six stages namely such as financing, mission statement, the classification of a society selection, asset introduction, recruitment and the flag selection. Under these, the port should make decisions which include the type of vessels it will operate, the type of clientele it will target and the source of capital. This is the flag type that will determine the taxation bracket where the shipment company will fall.
In the service processes stage, the procedures that take place within the basis of the shipping company, its clients and suppliers are incorporated. These processes summarize the measures taken in the operations, chartering, freight collection, supplies, disbursements, accounting department, and the vessel (Dinwoodie & Xu 2008). The operation department is involved primarily in the processes that draw customers to the port and at the loyal base of customers. Furthermore, the supplies department, on the other hand, deals closely with the operations department. This department provides fuel as well as other supplies.
Then the accounting department begins to record expenses and revenues of each vessel of the port per trip. The ports authority of New York and New Jersey both give port services to the ships. This affects the ships’ turnaround time and ultimately the shipping company’s image and profitability.
At the output point, the procedures that bolster the provision of the ultimate product to the end client take place. At this point, the processes that warrant the integrity of the transportation of the cargo, its safety, handling operations, reliability of service and quality are included (Condit 2004). Here, professionalism has to be employed when handling the cargo in order to ensure its safety and security and that transportation are timely done.
The port of New York and New Jersey should facilitate the above processes by constantly repairing the channels. Moreover, they should make sure that the cargo handling equipment is sufficient to manipulate the large volumes of load that gets to the port. This is done to guarantee that the port does not delay ships at the harbor. In addition, the port should ensure the security of cargo as well as timely and convenient transportation of it to the respective customers.
Usefulness of the Analysis
This analysis has helped shed light on the processes that are followed in the shipment industry. While at the onset, the models appear sequential in nature; thus, this is a model of generic type which aim is to represent the basic functions and flows that are established in a particular industry. Wolanski (2006) notes that the importance of this analysis is in its capability to stop (include constraints that deter the situation from being as it is ideally). Once reviews have been carried out, the decision to rework a particular process or to get to the next process is made.
The importance of producing a generic system model GSM as achieved by the input –output analysis. It is the creation of a template on which investigations on the shipment industry can be conducted in the future. Further, this study can allow the study of each variable effect on the shipment industry. Moreover, it is extremely difficult to measure some of variables, such as market changes and delays in ports due to strikes. It is quite difficult to decide their impact on the companies' businesses and functions. However, once these measures have been established, the outcome of such a study gives insight into which variables have the highest impact. Further, research is being carried by the authors and is a subject of a content of a Ph.D. program (Olivella 2000).
Low Carbon Shipping
Here, the article will employ hard systems approach (H.S.A) in order to solve the environmental pollution at the ports. This process includes some steps namely such as identification of a problem or an opportunity, description of the situation (could be diagrammatic) as it currently, as well as how it would be ideally identification of ways to measure if your objectives have been achieved. It establishes how identified routes operate in practice (including pilot tests), selection of the most appropriate routes will be followed and finally follow the route and monitor the results.
There is a need to address the pollution that is witnessed in and out of the ports courtesy of the ships and the port machinery. This pollution is mainly due to the carbon emission. A lot of these emissions currently go to the environment polluting it fundamentally. There are several severe ways in which carbon emissions over the years have contributed to environmental pollution, which cannot be dwelt in detail. However, ways of countering the same will be discussed. Ideally the level of carbon emissions can be reduced fundamentally if measures were taken into place and the laissez faire manner.
Once the reduction of carbon emission has been achieved, it is possible to measure this by means of the observation of the environment and the use of carbon detectors. There will be a need to employ technical measures and the development of alternative fuels for the shipping industry. Technical measures generally focus on ways of redesigning ships utilization of energy to ensure efficiency. These measures are linked with the design and building of ships (e.g. hull design); optimization of the propulsion system to control and efficient operation of the main and auxiliary engines, and retrofit on existing ships (Sciutto 1998). These measures will assure that ships reduce their carbon emissions as less fuel will be required to move ships from a destination A to B., moreover the cost and the difficulty of fitting these designs, however, has been a key constraint to the achievement of this goal.
Alternative fuel and power sources form another set of technical measures. Haley (2003, p.41) claimed that the alternatives range from supplementary measures (e.g. wind and solar) to complete switch of fuel (e.g. to gas, nuclear, or bio-diesel), and generally require essential investments upfront, both in new infrastructure and onboard.
Operational strategies relate to the way the ship is sustained and operated, which include plans such as hull and propeller cleaning, optimized trim and ballasting, and optimized weather routing, better engine maintenance, and scheduling. Operational measures do not need a significant investment in hardware and equipment structure. Furthermore, these measures have low investment needs and modest operating costs. Actualization of many of these measures needs execution of programs that involve changes in training and management. Many of these actions are agreeable for economic reasons (Morrison 2012).
Therefore, operational measures can be put into place in the short run among other regulations in order to ensure that ships and ports do not release carbon carelessly into the environment as these are not cost effective measures. However, the technical measures should be invested in as those will eventually contribute to the greatest reduction in carbon emission (Olivella 2000).