Re-orientation of liner shipping into logistics services provider (LSP): and its impacts on BOP of developing economies

Shamszadeh, Mehdi (2007) Re-orientation of liner shipping into logistics services provider (LSP): and its impacts on BOP of developing economies. Doctoral thesis, London Metropolitan University.

Abstract

The shipping industry has experienced profound changes in terms of structure, size of ships and the role of shipping lines. The growth of liner shipping, containerisation and the integration of logistics services with traditional shipping are important trends. Changes in world trade patters due to globalisation and evolutionary trends in the liner shipping industry have create opportunities for shipping to act as a catalyst to in the growth of developing countries. This study was undertaken as a result of the recognition that due to their unique geographical characteristics, transit and landlocked developing countries can enjoy cost advantages and increased trade from global logistics and efficient integrated transportation services. Iran, its national shipping line, and the neighbouring CIS landlocked countries provide an ideal laboratory for examining the position of landlocked and transit countries in terms of the effect that a logistics service would have on their growth prospects. The thesis reviews the economic geography of shipping costs in relation to Iran and the CIS countries and the links between globalisation, liner shipping and containerisation and global logistics. The basic proposition which has a number of dimensions states that the reconfiguration of the conventional shipping line in a developing transit country, into an integrated services provider will have a positive impact on the country's balance of payments and also benefit the neighbouring landlocked countries, because of the effect of lower costs on international trade links and activity and through the provision of a more efficient service. The aims of the thesis are to quantify, for the first time in the literature, the contribution and the net effect that the transformation of a national shipping company into a logistics services provider will have on a country's Balance of Payments; identify an appropriate logistics model by which such a transformation can be undertaken and assess the impact on the landlocked countries of the CIS and the benefits for cargo interests. An appropriate logistics model to be adopted in the reorientation process is identified by a critical examination of merits and suitability of models in supply chain design. This model provide a conceptual framework for designing an appropriate programme of empirical research. The original empirical research included the development and estimation of a financial model to quantify the impact of the proposed reorientation process on the BOP, an interview survey of shipping officials and cargo interests to establish the attractiveness of the proposal and its potential impact on trade volumes, a detailed evaluation of liner shipping and the use of investment appraisal techniques. The thesis finds through regression technique, the future trend of container operations through transit country (Iran) and therefore measures its impacts on BOP of the country, for the first time, on transport sector of the economy. It also identifies the micro economic benefits for the liner operator in re-orientation process. The findings of this thesis will be useful to economic development of transit developing countries and to liner operators of such countries in their integration process to transform to logistics service providers.

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