INTRODUCTION
The needs and expectations of a rapidly growing world population can only be met by
transporting the products. Due to the geographical extension and dispersion of production
places, global transportation modes getting more attraction in the last decade. UNCTAD (2014)
stated that almost 85% of international trade in products is carried at sea by shipping industry.
Thus, the shape of the world economy is highly dependent on maritime industry.
Ports are the milestones of that industry in all over the world. Ports measure the volume of
containers they handle in twenty-foot equivalent units (TEU), the standard size of a container.
In 2014, approximately 650 million TEU were handled by all ports world-wide (UNCTAD,
2014). Based on Clarkson (2014), global containerized trade is projected to grow by 5.6 % in
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year 2014. Lam and Yap (2011) told that containerization has fragmented the shipping
operations and network integration.
In the maritime industry, there exist a range of actors which offer various activities and stand
for different functions. Suppliers (shipyards, educational institutes, bunker, provision), ship
owners and ship management companies, intermediaries (ship agents, ship brokers, freight
forwarders), customers (charterers, shippers), port authorities, customs, stevedores, class and
survey institutions, insurance companies, and banks are the actors in maritime transportation
system (Deveci, 2013, p.24). These actors as represent different activities and stand for different
functions, must act in an integrated and coordinated manner to offer efficient, effective,
economic, sustainable and environmental friendly maritime activities.
The reality is that the deep meaning of maritime activities can be defined by logistics activities.
Logistics is defined as the process of planning, implementing and managing the movement of
products and information from one point to another. Logistics is a highly broad concept which
involves many businesses and management related functions and also it is divided into many
activities/functions which can be listed as follow: Transportation, inventory management, order
processing, warehousing, customer services, handling, packaging, labelling, information
management, returned product management, salvage scrap disposal, and site/location selection
(Lambert, Stock, &Ellram, 1998; Ballou, 1999; Wood, Barone, Murphy, & Wardlow, 2002;
Bowersox, Closs, & Cooper, 2010). Correspondingly maritime industry is also highly broad
concept in which all maritime related fields such as ship owning, chartering, agents, brokering,
forwarding, stevedoring, supply management, port management, maritime business
administration, etc. are involved. The broad nature and scope of logistics and maritime industry
make it more difficult to specify the borders of maritime logistics. In this chapter it is tried to
draw the framework of maritime logistics concept as far as possible with the help of topics
namely; transportation and traffic management, inventory management, demand forecasting,
material handling, packaging and labelling, port logistics, green maritime logistics and decision
problems in maritime logistics
BACKGROUND
Maritime logistics is formed by a combination of transshipment functions and maritime services
at ports. But it is not easy to define ‘maritime logistics’, surprisingly to prove this difficulty,
any clear definition, scope and role of maritime logistics have not been appeared in the
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academic literature yet (Lee, Nam, & Song, 2012, p.9). Hult et al. (2007) defined the value of
maritime logistics as facilitating the higher efficiency and effectiveness of a maritime logistics
service. According to Panayides (2006), “the integrated demand for maritime transport brings
on a maritime logistics concept”. Lee and his friends (2012, p.11) define maritime logistics as
follow:
“Maritime logistics is referred to as the process of planning, implementing and
managing the movement of goods and information involved in the ocean carriage.”
The main issue in maritime logistics lies down in the concept of integration which has to be
occurred in physical level (intermodal or multimodal), economic/strategic level (vertical
integration, management structure) or organizational level (relationship based, people and
process integration between organizations) (Tuna & Arabelen, 2013).
There are three important actors in maritime logistics system: shipping, port/terminal operating,
and freight forwarding (Table 1). The main function of shipping is to move cargoes of shippers
from one port to another. By adding logistics activities to the main function like collecting the
cargoes in one point, informing the delivery position, helping customers who want special
services, preparing bill of lading, container tracking, performing intermodal services and
information flow (Heaver, Meersman, & Van de Voorde 2000), the shipping service gets more
close to the value added shipping logistics concept.
The main port/terminal operations are; loading ships, discharging ships and preparation of
cargoes for final destination. In modern logistics system ports also contain value added services
like warehousing, packaging, inland connections, repairing and assembly which make ports a
cluster of organizations to fully become a link in supply chain (Bichou & Gray, 2004; Carbone
& De Martino, 2003).
Table 1. Main Function and Supportive Activities of Maritime Logistics (Lee, et al. 2012)
Shipping Port/Terminal operating Freight forwarding
Main function Moving cargoes
between ports
-Shipping reception
-Loading/unloading cargoes
-Stevedoring
-Connecting to inland
transportation
Booking vessels and
preparing for requisite
documents for ocean
carriage and trade on behalf
of shippers
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Supportive
logistics activities
-Documentation
relating sea trade
-Container tracking and
information flow
-Providing intermodal
service
-Warehousing
-Offering distribution center
-Testing
-Assembly
-Repairing
-Inland connections
-Inventory management
-Packaging
-Warehousing
In general, freight forwarding can be considered as a dimension or a function of logistics
outsourcing which deals specifically with the transportation of freight. Lambert et al. (1998)
defined freight forwarders as companies that serve both to shippers and carriers by organizing
and coordinating the transportation of goods. So in the international trade process, sometimes
freight forwarders act on behalf of shippers by providing the main activities like reserving a
vessel, preparing bill of lading and other documents and with the supportive logistics activities
like inventory management, packaging and warehousing (Table 1). On the other hand, Yang
(2012) claimed that ocean freight forwarders must respond promptly to clients’ complaints and
cargo claims, and must provide customized logistics services to compete in this dynamic
marketplace. Lately, customers are willing to pay annual fee and to make contract with the
freight forwarders networks (IFLN, WCA, Pacific Shipping, Combined Logistics Network,
Asian Groupage Service, Planet Logistics Network and Mac-Nels).
The maritime logistics definitions discussed previously indicate activities for which the
maritime industry actors might be responsible. It can be said that maritime logistics is not a
concept that just shows the performed logistics activities like warehousing in addition to the
main activities like shipping. It is a concept with broader philosophy which contains integration,
coordination, value added customer services, lower costs, higher flexibility, reduced response
time and higher quality. The list is quite comprehensive; it is worthwhile to discuss important
maritime logistics functions and their relationship with other functions in the firm’s supply
chain.
MARITIME LOGISTICS FUNCTIONS
Transportation and Traffic Management
Transportation is the operational main activity in the maritime logistics system. Because of its
fundamental importance, all decision makers have directed significant attention toward
reducing cost of transportation. Economies of scale benefit and reduction in unit cost can be
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achieved by carrying high volume of cargo in one voyage. Maritime transportation can be
classified into three types: industrial, tramp and liner shipping. Under this topic we will handle
these three maritime transportation types in general.
Industrial Shipping: Industrial shipping refers to the case where the cargo owner also owns the
ship and aims to minimize shipping costs (Ronen, 1983).
Tramp Shipping: Tramp ships are similar to taxis as they try to catch up the available cargo that
cargo shipped generally belongs to one owner. Tramp shipping is a kind of shipping which in
the long run does not have a fixed itinerary, and which carries mainly bulk cargoes over
relatively long distances and from one or more ports to one or more ports by any vessel with a
tonnage of 4,000 dwt or above (Metaxas, 1972, p.271). The freight rate in tramp shipping
fluctuates seasonally according to the ship size, charter durations and market conditions. The
major difference between tramp and liner shipping is the unscheduled, open market mode of
operation (OECD, 2002, p.20). The cargoes that carried in tramp shipping are generally in the
form of semi-product or raw material that will be used in industry to produce final products.
There are three main categories of bulk cargo carried in tramp shipping (Stopford, 2009, p.64):
 The five major bulks: Iron ore, coal, grain, bauxite/ alumina and phosphate rock
 Minor bulks: Agri-bulks, fertilizers, metals, minerals, steel and forest products
 Liquid bulk: Crude oil, petroleum products, and liquid chemicals cargoes
Liner Shipping: Liner shipping offers a special service for the shippers who prefer a constant
rate rather than a fluctuating market rate. Liner shipping; specializes in the transport of small
cargo parcels, which do not fill the hold of a ship, on regular services. The main classes of
cargoes in liner shipping are loose cargo, containerized cargo, palletized cargo, pre-slung cargo,
liquid cargo, refrigerated cargo, and heavy cargoes (Stopford, 2009, p.65).
Table 2. Maritime logistics versus maritime transportation, (Lee, et al., 2012, p.12)
Maritime Transportation Maritime Logistics
Concept The process of carrying and
handling cargoes across the ocean.
The process of planning, implementing and
managing the movement of goods and
information involved in ocean carriage.
Focusing
point
Maritime transportation emphasizes
individual functions relating to sea
transportation. Each function
Maritime logistics is concerned with not only
individual functions relating to sea
transportation, but also an effective logistics
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pursues its own aims or
competitiveness.
flow as a systematic entity of the logistics
integration system.
Managerial
function
Sea transportation activities:
contracting, shipping, sea voyage,
moving cargo, and
loading/unloading.
Sea transportation activities:
Contracting, shipping, sea voyage, moving
cargo, and loading/unloading.
Additional logistics services:
Stripping/stuffing, storage, warehousing,
offering a distribution center, quality control,
testing, assembly, packaging, repacking,
repairing, inland connection, and re-use
As seen in the Table 2 while maritime transportation is just focusing on the individual functions
relating to sea transportation, maritime logistics focuses on the effective and efficient cargo and
information flow in the scope of logistics system. Maritime logistics does not only interested in
sea transportation activities like shipping, loading and unloading but also in value added
logistics activities like warehousing, packaging, repairing, stuffing, storage, etc. Maritime
transport operators are accordingly encouraged to keep pace with other logistics functions as a
central member of a global logistics integration system (O’Leary-Kelly & Flores 2002;
Panayides 2006; Panayides & Song 2008).
Traffic management and routing is a part of transportation sub-function of logistics. In maritime
transportation routing depends on the type of shipping. Routes in liner shipping are
predetermined, the loading and unloading ports are fixed and time schedules are certainly
established. In tramp shipping there is not any predetermined thing related with routing. Route,
ports and the time are determined with the order of cargo carriage. Kendall and Buckley (2001)
also consider the industrial shipping in which there are fixed ports but flexible sequences and
schedules.
Inventory Management
Inventory management concerns with trying to reduce the stock level and relating costs as low
as possible. Song and Lee (2012) suggested that maritime managers who obtain significant
customer information can constantly update on market demands. Later, they can forecast the
market situation and that gives them a positive effect to coordinate their inventory management
systems. Inventory planning has a critical role in customer service level. Service level can be
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measured as an order time, lead time, case fill rate, line fill rate, order fulfillment rate or any
mix combination of these.
In the old times, both shipping companies and ports offered just basic logistics functions to their
customers. Now days, the competition is getting larger each day, the new logistics services
have been offered by shipping companies to gain a competitive advantage. Inventory
management is a kindly new service for the ports to manage customer inventory and fulfill their
orders. In maritime transportation most often occur in vertically integrated companies, where
the same company controls all inventories as well as the fleet of ships transporting the products
(Stalhane, Andersson, Christiansen, & Fagerholt, 2014).
Many firms prefer to decentralize the inventory management in charge of the flow
synchronization between overseas assembling plants and first tier suppliers in the port (Carbone
& De Martino, 2003). They suggested that procurement and pre-assembly stages are becoming
an important significance and shape the inventory management of ports. With using some
information technologies ports should provide some inventory control activities such as;
palletize racked-unracked option, lot and serial number control, cycle count review process and
vendor managed inventory – wherever products are in transit from the port or moving to their
final destination.
Vendor managed inventory (VIM) is a stock management method that a supplier of products is
responsible for optimizing the inventory held by a distributor. VIM agreements in which the
supplier takes control of their tanks inventory levels, ensuring that adequate service levels are
maintained. In maritime logistics, a fleet of ships transport multiple bulk goods from a set of
production ports to a set of different customers, have their facilities (Giesen, Munoz, Silva &
Leva, 2007).
On the hand, inventory management also can be defined as controlling all contract affairs
relating to rental, equipping and usage contracts for land areas, buildings, floating installations,
as well as the clearing of contaminated sites and the removal of explosive ordinance on rented
land areas which is located in the p

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