Purpose: The purpose of this assignment is to demonstrate a comprehensive understanding of the functioning of a port in trade operations. Phases and requirements: This assessment has multiple phases (team formation, presentation for feedback, and report). While the marking is based on the report, the report must consider the feedback provided during the inclass presentation. There are three aspects to consider: A. Team formation and port selection: Each team must have between 4 to 6 studentmembers. Each team needs to select a port from the following Excel file (click hereLinks to an external site.). You can only select a port in the Excel file once your team has at least 4 members By the end of Week 4, each student needs to be part of a team. If by then you are not part of a team, the lecturer will assign you to one B. Presentation for feedback (this you do not submit in Canvas) Do not submit the presentation in Canvas. Each team is required to send the presentation (e.g., PowerPoint, etc) to the lecturer before class in Week 8. During the inclass presentation in Week 8, your team will provide an overview of their team report findings (see section B. Report below), and, more importantly, focus on one or two aspects for which the team would like to obtain some feedback from the class. Length of presentation, 12 minutes maximum per team. Not all members must present, but all members must be ready to answer any question. B. Report requirements (this is what you have to submit in Canvas on Week 9) Brief but clear overview of the chosen port including its location and historical evolution. Detailed description of the port, including modes which it serves, important infrastructure, intermodalism capabilities, key import and exports, and documentation required for import. Analysis of the ports competitive advantage by comparing it against a Vietnamese port. You should focus on at least three relevant determinants of country competitiveness, and compare them visavis with the Vietnamese counterpart. The Vietnamese ports to compare against differ by class group: SGS_G01 (Oanh, Fridays 15:00): compare your port against Danang port. SGS_G02 (Duy, Wednesdays 11:30): compare your port against Quy Nhon port. SGS_G03 (Duy, Wednesdays 15:00): compare your port against Hai Phong port. SGS_G04 (Santiago, Thursdays 08:00): compare your port against Ba Ria Vung Tau port. SGS_G05 (Santiago, Thursdays 11:30): compare your port against Quang Ninh port. HN_G01 (Oanh, Wednesdays 11:30): compare your port against Cai Mep port. HN_G02 (Oanh, Thursdays 11:30): compare your port against Cat Lai port. Analysis on comparative advantage, by focusing on one product that is produced both in that country and in Vietnam, and analysing which of the two countries has a comparative advantage against the other with respect to that product. Analysis on operational challenges of the port, followed by a recommendation to overcome those challenges. Conclusion providing a summary of the main findings and, importantly, mentioning how you incorporated the feedback (obtained during the inclass presentation) in your report.
1 ABBREVIATION AI: Artificial Intelligence AMCP Award: Asia Maritime Container Port Award ECRL: The East Coast Railway Line EDI: Electronic Data Interchange FDI: Foreign direct investment GCMS: Gate-Control-and-Monitoring-Systems H-O model: Heckscher–Ohlin model HR: Human resource ICT: Information, Communication & Technology KLIA: Kuala Lumpur International Airport LTIA: Long Thanh International Airport MOT: Ministry of Transport P&A: Parts, accessories for office and automatic data-processing machines PTP: Port of Tanjung Pelepas ROW: rest of the world T&D: Training and Development TEUs: Twenty-foot equivalent unit TOS: Terminal-Operating-System UIH: Quy Nhon Port VCS: Vessel Clearance Systems TABLE OF CONTENTS EXECUTIVE SUMMARY I Introduction II Analysis Overview 1.1 Location 1.2 Historical evolution: .8 Description of the port Competitive advantage 11 3.1 Country level 11 3.2 Industry level 12 3.3 Firm level 16 3.4 Conclusion 17 Comparative advantage .17 Operational challenges and recommendations 19 5.1 Digitalization process 19 5.2 Bunkering hubs 19 5.3 National coordinated port policy 20 III Conclusion 20 IV References 21 V Appendices 31 EXECUTIVE SUMMARY The development of Malaysian logistics and transportations strongly depends on maritime industry in which the performance of large seaports plays an important role In this report, one of the biggest ports in Malaysia – PTP will be analyzed to comprehend its significant contribution in country’s logistics Particularly, PTP is a container terminal located at Iskandar Puteri in Malaysia, and part of the APM Terminals Global Terminals Network In this report, initially, the overview of PTP including its strategic location and historical evolution as well as its description are delivered in the first two sections so as to help people have the general information of PTP for better understanding of following sections In order to acknowledge the port comprehensively, several determinants at three levels are analyzed to understand more about the competitive advantage of PTP compared to UIH At first, the research of three determinants at country level including internalization, infrastructure and science & innovation is provided to emphasize how the development of country can impact the port performance in both countries in general After that, three relevant determinants (factor conditions, demand condition and related, supportive industry) in logistics industry are considered since PTP and UIH belong to that industry Regarding factor conditions, we decided to focus on three factors, which are advanced infrastructure, skilled labor and scientific skillset since those are the most emerging factors need consideration for logistics industry Concerning demand conditions, our main focus is how the consumer demand on e-commerce affects demand from logistics firms and thus, the seaport freight and logistics in both countries Meanwhile, we pay attention to how ICT industry affects the technical aspects of transportation and operations in both countries Finally, the comparison of PTP and UIH companies is given in terms of technology & innovation, organizing principles and influencing factors at the firm level so as to show a precise and accurate comparison of two ports In short, we found out that PTP outperforms UIH based on the discussion of above mentioned determinants In the fourth section, comparative advantage of Malaysia and Vietnam with respect to the product of P&A is analyzed based on factors of production such as capital and labor according to H-O model Then, RCA is utilized to recognize the CA of Vietnam and Malaysia in reality, compared to theory In short, it is still shown that Malaysia has CA of producing P&A against Vietnam based on H-O theory, but this is not accurate in reality In the final section, three operational challenges which are digitalization process, bunkering hubs and national coordinated port policy are identified as recommendations related to HR, procedures or port policies are proposed to help PTP resolve those challenges and develop better I Introduction The analysis of PTP-Malaysian port will be highlighted via characteristics and in comparison, with UIH-Vietnamese port with the focus on its competitive advantage based on several determinants at three levels However, since the logistics industry strongly influences the port operations and performance, determinants at-industry-level are especially stressed according to Porter’s Diamond (1990) Moreover, some challenges and recommendations of PTP are also indicated for better advancement of the port operations Additionally, CA of P&A in both countries is also analyzed to know which country has more well-developed factors of production for P&A manufacturing Overall, this-paper-is-helpful-to provide-comprehensive-knowledge-of- not-only-the-port-but-also-Malaysia’s-progress-of maritime-logistics-regarding-operations-and- technology II Analysis Overview 1.1 Location PTP is the largest and world-class container port in Malaysia, strategically positioned at the Southern tip of the Malaysian peninsula and at the confluence of the busiest East-West shipping lanes that cross the Malacca Straits, which is the arterially shortest shipping route connecting the Indian Ocean and the Pacific Ocean (South China Sea) (Figure 1) Thus, PTP's advantageous location makes it an ideal gateway port for the world's other economic regions such as Europe or U.S (David and Renkena 2000) 1.2 Historical evolution: Periods Historical evolution of PTP October 1999 The port became operational (Jica n.d.) March 2000 PTP achieved a ficially launched PTP handled 1M TEUs in the first 571 days of operation, setting a world record for fastest growing port (MMC 2022) November 2001 PTP achieved a throughput of 2.05M TEUs, successfully 2006 executing 2.286 container ship calls Won the award “Best Emerging Container Port” (PTP 2002) June 2010 Malaysia's PTP Wins Lloyd's List's prestigious AMCP award PTP attained a productivity target of 35 moves per hour compared to the industry average of 25 moves per hour (PTP 2010) August 2012 PTP currently serves 26 shipping lines and is Malaysia's largest container port It is one of only seven ports worldwide selected by Maersk Line for the new "Daily Maersk" service (PTP 2012) PTP became the first port in Southeast Asia to receive the world's 2019 largest, latest container of Mediterranean Shipping Company (MIDA 2022) Description of the port Elements PTP PTP is Malaysia's most important port, having a technologically equipped Mode of transportation container terminal and being at the junction of main international shipping routes that pass across the Malacca Straits (PTP 2022) Important On the infrastructure side, the container-storage-facilities-cover-290 acres and infrastructure can hold 6M TEUs There are also-about-4000-reefer-hookups, 140 gantry cranes, 350 trailers, 45 post-Panamax-cranes, and-other-equipment-service-the- Intermodalism port-berths (PTP 2020) The port's container handling capacity has increased to- capabilities 145M-TEUs A custom-built information technology system that provides real- time container tracking and automated scanning has significantly boosted the Key imports port's efficiency (PTP 2022) and exports PTP started the expansion of the container storage yard which will add over hectares of new space for container storage and is expected to be completed by Q3 2022 (PTI 2022) Once all the aforementioned projects are completed in 2022, PTP’s capacity will increase to 12.5m, accelerate the conversion, optimized ITS systems and infrastructure, and encouraged digitalization-and-automation (Container News 2022) PTP is linked to Singapore by the North-South highway and to Malaysia's capital via the Malaysia-Singapore Second expressway (APM Terminals n.d) PTP is Malaysia's most developed container port with an annual capability of 12,500,000 TEUs and it is expected to increase to 15M TEUs in the following years (PTT 2022) The-most-recent-exports-are-led-by-Integrated-Circuits, Refined-Petroleum, Palm Oil, Semiconductor Devices (Figure-1) The most valuable imported goods are electronic integrated circuits and micro assemblies, refined petroleum oils, computers and ethylene polymers considering overall cost (OEC 2022) Besides, the top imports of Malaysia are Integrated Circuits, Refined-Petroleum, Crude- Petroleum, Special-Purpose-Ships, and Broadcasting Equipment (Figure-2) Documentation Invoice, packing list, delivery letter, leaflet, catalog, insurance, certificate, required for Bill of Lading, letter of credit, licenses and certificates, proof of fare import payment, declaration form no.1 (ITA n.d.) Those types of documentation help Malaysian importers to process transactions in all ways such as scheduling, payment assurance and claim on losses (Hiraide et al 2022) 10 Operational challenges and recommendations 5.1 Digitalization process The first difficulty of PTP, according to Beth (2020), is related to the digitalization process PTP adapted to new technologies at an astonishing rate Modern technology is always fraught with security concerns Furthermore, because people are the port's most important resource, a lack of skilled personnel is a challenge for PTP's digitalization process Both aforementioned factors slow down the digitalization process and make it more difficult for people to use technology for port activities PTP is recommended to develop various digitalization platforms to increase the diversity of technologies and tools applied They should increase their security to avoid cyber-attack due to high technology For human resources, they should provide training and empowerment for employees towards higher knowledge, performance and productivity The meaning of this recommendation is that digitalization process should be conducted in both factors, human as well as equipment to generate advantageous environment for PTP to develop This helps the digitalization process enhance PTP’s performance and become consistently productive and safe 5.2 Bunkering hubs PTP may face the second bunkering challenge since they aim to become Malaysia's bunkering hub (Hellenic Shipping News 2019) According to David (2018), the issues include environmental concerns, high and concurrent demands and workload (bunkering and cargo operations at the same time), and failure to follow operational procedures This causes inefficiency in both trading and bunkering It is recommended that detailed and strict procedures be established to ensure that bunkering expansion plans not jeopardize the benefits of other stakeholders or the environment PTP's activities will become more logical, and they will have more opportunities to gain diverse benefits in addition to traditional exchanges 19 5.3 National coordinated port policy According to Zaideen (2021), Malaysia's current port system is fragmented and fails to efficiently collaborate among the bodies due to lack of an integrated strategic framework, incoherent decision-making, overlaps between authorities, and duplication of port policies Malaysian’s lack of coordinated policy could cause port congestion and physical constraints because of imbalanced cargo concentration (Othman et al 2019) Thus, problems with the existing system's planning, execution, and policymaking demonstrate the failure to create sustainable growth for PTP and Malaysia ports Therefore, coordinated policies or cooperation schemes must be created to provide proper framework for stakeholders in port activity to establish more resilient and sustainable ports (Zaideen 2021) The cooperation among port bodies includes, but is not limited to, cooperation between various ports, cooperation between terminal operators, and cooperation with other service providers (Pallis and Notteboom 2022) Overall, by implementing integrated policies to ensure sufficient management of the port sector, all Malaysian ports and PTP itself could enhance competitiveness III Conclusion Malaysian PTP has strategic location and historical evolution which contribute to its exceptional development At country, industry, and firm levels firm Malaysia has diversified edges including internationalization, technological innovation, infrastructure, factor and demand conditions, related and supportive industries, and organizing principles that generate PTP’s competitive advantages against PQN Parts and accessories of machines (SITC 759) are elected and applying H-O model to justify that Malaysia has more CA in producing it than Vietnam PTP’s operational challenges include low integration between regional ports, digitalization process, and bunkering hub expansion In reflection, we are-recommended-to-apply-Ricardian model in CAs analysis However, we realize it is not necessary to use it as we only have one product to analyze Additionally, we should choose essential findings to incorporate in the report because our-presentation-adjusted-various-points-of competitive advantages, operational challenges, and recommendations-that-are-not-extremely-sufficient-to-demonstrate-Malaysian-PTP's-strengths and-weaknesses 20