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Shanghai International Port (Group) Co., Ltd. (SIPG): Two-way navigation brings multiple benefits

2016-07-20Sino-Swedish Corporate Socialadmin0010

Company Profile
 
Shanghai International Port (Group) Co., Ltd. (SIPG) is the largest joint-stock port operator in mainland China. Having been reorganized successively by the Shanghai Port Authority and the Shanghai International Port (Group) Ltd., SIPG was launched by five incorporators including the Shanghai State-owned Assets Supervision Commission and China Merchants Holdings (International) Company, Ltd., and was listed on Shanghai Stock Exchange on October 26, 2006. In 2011 it closed its asset purchase of Yangshan Deep-Water Port phase-2 and phase -3.
 
SIPG’s major business covers container and bulk cargo handling, port logistics and port services. It ranked No.1 in 2013 in terms of container throughput. An industry chain for port logistics has been formed now, in which integrated services such as port handling, stockpiling, shipping and land transport agency. SIPG has 14 subsidiaries in Shanghai, 2 internal organs, 23 second-level subsidiaries (wholly-owned and stock holding), and 12 sharing enterprises. 
 
Challenges
 
As a large deep-water port in the open water of Shanghai, the Yangshan Port carries an important function of import and export logistics transition. It is an important part of the Shanghai Port. Favorable policies in duty and finance, following the establishment of the China (Shanghai) Pilot Free-Trade Zone and the construction process of Shanghai as an international shipping center, would bring drastic increase to the delivery volumes of foreign cargoes at Shanghai. With ships coming and going more frequently, the throughput of the Yangshan Port have to meet a higher standard. However, the low navigation capacity of the main channel and some objective factors such as complicated hydrologic and weather conditions directly restricted the upgrade of operation ability of the port, which prolonged production time, lowered the utilization rate of berth and reduced the punctuality of ship line. In this regard, the core competence of the port was undermined and the costs of shipping companies were increased, which caused economic losses to clients, degraded business quality and tarnished brand reputation. 
 
Constrained by geological scope, visibility and technological factors, the Yangshan Port was neither able to expand operation area nor extend time for navigation. Since each ship have to follow strict operation process for piloting, it was hard to substantially raise its speed. Therefore, the port was challenged as to how to effectively enhance efficiency within limited time and space.
 
 
Solutions
 
In order to enhance navigation capacity of the main channel, in August 2011, SIPG together with the Shanghai Maritime Bureau, jointly decided to carry out professional researches on improving the navigation function of the Yangshan Port and changing its one-way route scheme. By means of hydrometeorological observations, ship simulation experiments as well as investigational and theoretical studies, the research group had a full grasp of hydrometeorological patterns of the waters near the Yangshan Port, breaking through the juristical, technological, geographical and managemental barriers that had impeded the two-way navigation in the main channel.
 
In the transformation process of the one-way route scheme, the Shanghai Maritime Bureau mainly took five measures to provide guarantees: Firstly, a specialized VTS duty office was added. A specially-assigned person was responsible for the management of large ship dynamic program and the traffic operation of the two-way navigation. Secondly, emergency equipment was improved and the emergency response capabilities of the Yangshan port was enhanced. Thirdly, an innovative PRE PASS Cycle Safety Management was promoted. By prioritizing the safety supervision on key ships, it formed a closed-loop management mode so as to ensure navigation safety. Fourthly, a dynamic reporting system for ships in the Yangshan Deep-Water Port was developed in accordance with the rule of ship flows in the nearby waters. The system further regulated navigation order and enhanced navigation safety for the arrival and the departure from the port. Lastly, traffic separation scheme was adopted in the outer channel to standardize navigation behaviors and reduce risks of two-way navigation.
 
On the requirements that two-way navigation presents demands for the formulation of piloting plan, team cooperation among pilots, punctuality of harbor sailing and assistance from towing company, the Shanghai Port proactively convened  experienced pilots and dispatchers for technological discussions and risk evaluation, made thorough piloting plan and prepared emergency equipment. The piloting plan was also improved in actual operations.
 
After rigorous theoretical research, the Yangshan Deep-Water Port successively completed the two-way navigation test on July 1, 2012. The two-way navigation was tried out on February 16, 2013 and was then officially executed on October 15.
 
Achievements
 
Normalization of the two-way navigation brings multiple benefits.
 
For the Yangshan Deep-Water port, navigation capability of its main channel has been exponentially enhanced: the average waiting time for berth has been reduced from 3.5 hours to 1.75 hours; the berth utilization has risen from 72% to 84%; the number of pilot ships has been increased from 6,820 in 2009 to 9,793 in 2012. At the same time, improvement of service capabilities has enhanced the degree of satisfaction with shipping companies and established a good image of the port.
 
For shipping companies, since the enhanced navigation efficiency has kept the port clear, benefits brought to the companies have been dramatically increased. For example, if a 8500-slotting ship is to catch up a 10-hour shipping schedule, 500 thousand dollars would have been added merely for the fuel cost. But the two-way navigation substantially reduces the incidence of overtime shipping, thereby saving a large amount of risk costs for the company. In addition, the operation costs of shipping companies have also been cut down. Taking the Maersk Line as an example, in 2013 it has 14 ships on average calling at the Yangshan Port per week. Calculated by the standard that each unit of ship costs 38 dollars per minute and each voyage saves 1.75 hours, 2.9047 millions dollars is expected to be saved annually on theory. Besides, the two-way navigation has also enhanced punctuality of ship lines and controllability of time, which is favorable for shipping companies to formulate transition plans, enhance service qualities and reliability, and further promote progress in the shipping industry. 
 
For China, especially for Shanghai, a great progress in the navigation capability of the Yangshan Deep-Water Port provides a solid support for construction of Shanghai as an international shipping center. Enhancement in the efficiency of logistics transition has sped up capital accumulation and the flow of funds, making business environment in Shanghai, even in China much more attractive to foreign investments, and promoting development of the Shanghai Free Trade Zone.
 
Prospects
 
After the two-way navigation was put into practice in the main channel, SIPG is going to resume its cooperation with the Shanghai Maritime Bureau to carry out research on navigation safety for large container ships calling at the Yangshan Deep-Water Port in harsh weather conditions. This research is conducted to solve problems about foggy weather in rainy season and explore ways to accomplish all-weather two-way navigation. It will further enhance productivity of the port and shipping companies, reduce incidence of congestion and suspense, as well as strengthen international competence of the Yangshan Deep-Water Port. 
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