CHAPTER ONE

INTRODUCTION

1.1. Background to the Study

International trade is the performance of trade and investment activities across national boundaries (Voerman, 2011). In the world, around 90% of the volume of international trade in goods carried by sea is transported by ships and the percentage is even higher in developing countries (UNCTAD 2018).

The development of international trade has created a high demand of shipping and led to new ship and container design to accommodate different types of cargo and transport over long distances with minimal cost per tonnage to multiple markets around the globe within a short time. Shipping is the life blood of the global economy.

Without shipping, the bulk transport of raw materials, and the import/export of affordable food would simply not be possible. There have been a number of developments in the industry as time goes on especially in the area of cargo consolidation. Since the dawn of commerce, people have been using boxes, sacks, barrels and containers of varying sizes to transport goods over long distances.

The goods would be packed into small boxes and these were then manually loaded by individuals who would climb the ship’s ladder (gangway), and offload into the holds. These goods are at times stacked manually and the entire operation would take days depending on the size of the ship. Even as trade grew more advanced the process of loading and unloading remained very labour intensive, time consuming and costly.

This was so because, containers came in all shapes and sizes. Different-sized packages also meant space on a ship could not be effectively utilized, and also created weight and balance challenges for a vessel. And goods are likely to experience damage from handling or theft due to exposure (Trans.info, 2013).

With the advent of mechanical means such as cranes and derricks, heavier loads could be easily hoisted from jetty to the ship’s hold. However, the packages are still smaller in size and cranes could not be used to their full capacity (Kinwa Chan, 2003).

A substantial cost of shipping went into paying the dock workers for loading and unloading of the cargo. A few docks decided to put cranes and mechanical means to greater effect and for that they needed the packages to be much larger and at the same time to have the same yardstick in size.

This was the beginning of Unitization of cargo. Unitization is essentially grouped or bundled cargo, wrapped into packages and loaded onto or inside a bigger unit. These bigger units can then be handled by machines such as forklifts and cranes. Because of the big nature of some containers, the number of individual units to be loaded on the ships often reduced saving time and effort, increasing efficiency and lowering the chances of late deliveries.

A new method called pre-slinging came into existence to transfer cargoes like large pipes and steel cables. The entire cargo is shipped, along with slings as slung from the port of origin. At the port of delivery, the cargo can be directly offloaded without the hassle of lifting it manually to get the sling pass underneath.

The focus of unitization was standardization of the shipment as it would make the work of mechanical machinery more efficient. The most common form of unitization is palletization. The pallet acts as a platform for cartons and boxes to be stacked on it. The entire pallet then becomes a single unit with the cargo secured tightly onto the pallet base.

The next big step in unitization was containerization. Containerization brought about a paradigm shift in shipping logistics (Baier and Bergstrand, 2001). The rapid growth and globalization in container shipping market gave rise to intense competition among key players such as shipping lines, port authorities, and logistics agents. In order to survive competition and gain more business, these players are forced to adopt innovative, productivity enhancing and cost-cutting strategies (Dong, 2009).

At an operational level, a very important cost-cutting strategy is to efficiently and effectively manage the container fleet. Container fleet management is complicated due to dynamic operation, uncertainty and demand imbalance.

Dynamic operation is the nature of the shipping industry. Uncertainty exists in customer demands and container processing activities such as consolidation, movement, handling, discharge, maintenance and repair. Demand imbalance is a particularly important problem in container shipping.

For example, on the Europe-Asia trade route, European ports are experiencing a high surplus of empty containers, while Asian ports are facing severe shortage. Important decisions in container fleet management include fleet sizing, container leasing, laden container distributing and empty container repositioning. These decisions are highly related and were carefully managed (Dong, 2009).

In Africa, most ports account for 4% of global containerized trade volume, much of which comprises imports of manufactured goods. Africa’s shipping and ports do not always match global trends and standards. Cargo spends an abnormally long time in ports before it is moved inland. Apart from four container terminals in Morocco, Egypt and South Africa, no other African port was featured in the 2016 list of Top 100 global container ports (UNCTAD/PRESS/IN/2018/006).

In Cameroon, the port of Douala has been used as a trading port for Cameroon and its neighboring landlocked countries since the mid-19th century. Due to increases in cargo volume, various kinds of improvements have been carried out to its port facilities, mainly through assistance from the World Bank (Douala port modernization project 2005).

All through the first half of the 1980s Cameroon showed favorable economic development at an annual rate of 7.5%, and the volume of cargo handled at Douala Sea Port reached to 3.92 million tons in 1983. Given this situation and the background in which ports were increasingly moving toward containerization with their significant economic and safety advantages, there was a growing need for Douala Sea Port to upgrade its container facilities, in order to be prepared for increases in cargo volume (Douala port modernization project 2005).

On June 28, 2004 a joint venture between APM Terminals (44%) and Bolloré Ports signed a concession agreement with the Port Authority of Douala (PAD) to manage, operate and develop container handling at the port.

Investments have helped modernized infrastructure, increased container storage areas, acquired new equipment, and optimized the terminal operating system. Between 2005 and 2018, the volumes at the terminal have more than doubled from 131,994 TEU to almost 378,758 TEUs. This equates to average annual growth of 15%. (UNCTAD/PRESS/IN/2018/006).

Containers are the most vulnerable when static; hence ports and other terminals are key locations in insuring the integrity of containers. Container transport chain monitoring is needed both for supply chain management and security reasons. Authorities demand increased freight visibility in order to assure compliance with the regulations and to avoid import of illicit goods.

Possible solutions are adding monitoring equipment, such as e- seals and tracking devices, monitoring the environment using cameras and improved gate processes. The optimal use of these technologies requires sharing of information between different stakeholders.

1.2. Statement of the Problem

The advent of globalization has brought increased in the production and demand for goods and services (Brecht and Martin, 1996).

Effectiveness and efficient importation enhances a countries economy, leads to self-employment, reduces dependence on government and leads to the creation of new and innovative job opportunities (Manson, McCartney, and Sherer, 2001). In Cameroon, the Douala seaport is one of the busiest ports in West Africa. More than 95% of Cameroon’s maritime traffic transits through Douala, a sprawling hub that serves as the main gateway for landlocked countries like Chad and Central African Republic.

The management of the land transportation part of the international marine shipping of containers is an extremely complex activity, especially if the aim is to simultaneously optimize the cost and the service aspects of operations in a competitive environment. Management of a fleet of loaded and empty containers, at the operational, day-to-day level, is an important component of the overall operations of international shipping firms.

There is just one container terminal at the port of Douala that is the Douala International Terminal (DIT) which has been replaced by “Regie Terminal a Contenuer (RTC)” that is in charge of all operations and management at the port. This makes the port inefficient as all operations are to be carried out by a single company. Congestion comes as a result of this inefficiency which intends increases the port turnaround time.

A lot has been said and even more left unspoken about the environment of importation at the Douala Seaport. Popular opinion hold that the current atmosphere is plagued with a lot of ills (bribery and corruption, theft) especially in the area of clearing of goods at the Douala Seaport. Also, the availability of cargo handling equipment; there are several cargo handling equipment but they are insufficient for all the cargo handling operations carried out at the Douala Seaport.

Containers play a vital role in the security of shipped goods, but also, when containers are static they become vulnerable; they can be susceptive to theft, and other security threats. It is against this backdrop that this research is carried with an attempt to address issues between management and goods security.

1.3. Research Question

The research questions are divided into two parts; the main research question and the specific research questions.

1.3.1. Main Research Question

How does container management affect security of shipped goods in Douala seaport?

1.3.2. Specific Research Questions

1. What are the various type of container managements in the seaport of Douala?
2. What are the security problems faced in container management at Douala seaport?
3. What are the measures adopted to secure shipped goods in the Douala seaport?

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