Ocean Transport and the Facilitation of Trade

Albert Veenstra ()
Additional contact information
Albert Veenstra: Eindhoven University of Technology

Chapter 14 in Handbook of Ocean Container Transport Logistics, 2015, pp 429-450 from Springer

Abstract: Abstract In this chapter, we describe transactions in international trade transaction, and we zoom in on the ocean transport part of that transaction. We use transaction cost economics as our theoretical framework. We highlighted a number of ocean transport related processes that generate uncertainty and costs in logistics chains: the use of the container in pre- and on-carriage, the release process of the container in port, and the formalities related to the supervision on vessels coming into ports in the country of destination. A first estimate of the uncertainties and costs that follow from these processes (delays, additional time required for supervision) reveals that the uncertainties far outweigh the additional costs. This holds especially because companies take into account a certain degree of uncertainty in their logistics planning, even though the probability is very low. We extend this discussion with the fundamental problem of the information quality of the ocean carrier documentation, the ship manifest, which has negative consequences for risk assessment by Customs in Europe. We conclude that specific processes that are connected to ocean transportation do result in time loss, uncertainty and, to a lesser extent, in additional costs that impact the efficiency of logistics and supply chains. The transaction costs are predominantly generated as additional charges on the ocean transport bill, as a result of supervision, and as a result of the use of the container. Transaction cost theory predicts that if such frictions exist, there will be a tendency to move from a market relationship to a more hierarchical relationship between parties involved in the transaction. We observe that international transportation by sea is in an intermediate position between market and hierarchy and we identify at least two important developments in the Port of Rotterdam and its European hinterland that can be recognized as a further shift towards more hierarchy as a result of the frictions we identified.

Keywords: Supply Chain; Transaction Cost Economic; Empty Container; Global Supply Chain; Transport Operator (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-319-11891-8_14

Ordering information: This item can be ordered from
http://www.springer.com/9783319118918

DOI: 10.1007/978-3-319-11891-8_14

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().