Triggering Innovations in Shipping Industry - Essay Example

Enter your name Triggering Innovations in Shipping Industry Abstract Lately the Shipping Industry has attracted a lot of attention of many bulky corporations as it is one of those sectors that are supposed to ‘benefit’ from Global Warming. (Valsson) How? [...] Well for starters many shipping corporations have predicted a significant fall in the operating costs as the routes will turn out to be shorter and some even predict that a number of new routes will emerge that will be able to easily fill the gap between the East and the West, and since newer routes will emerge even more ships will be in demand as newer locations will also be accessible. Ship – transportation is the most extensively used mode of transportation for non – perishable goods and Crude Oil. And not to mention, it is the cheapest mode too. Although the Shipping industry does not even appear in the list of the most ‘preferred’ means of transport due to the fact that being the bulkiest form of transport, ships are awfully slow, and the speed of transportation can not even be compared between water transportation and it’s long known rival air transportation. Under some circumstances the speed of containers is about 15 times slower than that of airplanes. But still shipping corporations all over the world believe that they will continue to rule the transportation industry based on the lower costs of their transportation and ships as and when compared to airplanes. Besides a single ship can carry 10 times more than an average airplane, and the capacity of an Oil tanker can never be compared to the capacity of any other mode of transportation, Oil tankers are possibly the largest existing means of transport of all times. Can it really remain on top? Can the shipping industry beat all the heavy competition by other rival transportation segments? What are the triggers of innovation of this industry? Brief answers to all the above questions are offered in this report. An Introduction – Shipping Segment Selection The Shipping Industry is witnessing an era of growth with the water way cargo increasing by millions of tonnes every single year. And not to mention the fact that oil extraction from deeper seas is bound to double in the forth coming years, Oil is currently extracted from only till 500 meters in present, but it is expected that with support from new innovative technological advancements in the shipping industry, this natural gas and oil extraction process can easily be carried up to the depths of 1,500 meters within the next few years. (Simoes) To be able to do this many ship building companies have established R & D departments at their headquarters so that newer innovations could speed up the process so as to provide more production and supply that could match the constantly growing demand in this ever lasting industry. Newer innovations are not only necessary in the Oil extraction industry but are also very crucial in the Oil transportation trade (particularly through water ways by the means of Oil tankers). Oil tankers are currently the largest ships manufactured and are used for the transportation of Oil and Petroleum gasses only, currently no other liquid is transported through these ships due to several reasons such as the bulky size of these ships (what other liquid could be in such a high demand), and secondly the cost effectiveness. Transportation of Oil through these Oil tankers is an extremely costly procedure and thus it is not affordable to transport other liquid substances through these tankers. But recently due to the emergence of several new means of Oil transportation, some experts have predicted that this industry is bound to go down in the drains if drastic steps to reduce their costs are not taken soon. Many new techniques for Oil transportation such as extensive pipe lines that are connected on a cross country basis, development of new transportation and storage facilities, etc. Basically Oil tankers play a mammoth role in the Oil transportation industry as they are the bulkiest carrier of Oil (after pipe lines of course), amongst all the other channels of transport. The various transportation measures for Oil are the following (arranged from highest quantity carrier to the lowest): Oil Pipe Lines. Oil Tankers (This includes: General purpose Oil tankers, Large range Oil tankers, and Very large crude carriers or the ‘VLCCs’). Barges (Another Waterways transportation for Oil, much smaller than Oil tankers). Trains. Trucks. Amongst all the above Oil transportation measures mentioned only Pipe lines, Large Range oil tankers, and very large crude carriers play a role in the International Oil transport commerce. All the remaining sources such as General purpose oil tankers, barges, trucks, and trains are only capable of transporting Oil within national boundaries. So this basically concludes that in terms of international oil transport [...] Oil tankers are not frontrunners, and Oil pipelines being a cheaper source for transportation are more likely to continue to rule this Oil transportation industry. The Chosen One – Oil Tankers Oil tankers are directly confronted by not several but just one single rival in terms of the International Oil trade market; and the very obvious competitor is Oil Pipe lines. From tip to toe we have entirely focused this report on assessing the triggers of innovation in the Oil tanker business which is a major division of the international shipping and water ways transportation industry. Innovation Triggers in Oil transport Tankers The Beginning of a New Dawn Just as soon as Crude Oil was discovered in the grand year of 1859, Groups, discoverers, and transportation companies began to formulate the various possibilities through which crude Oil could be shipped all across the known world so as to boost the industrial development as Crude Oil was supposed to be the next big step towards industrial revolution. It was just like discovering the atom bomb of the 19th Century [...] truly, the much underestimated Oil was bound to be the monarch of the next era, an era where most of the manual labour burden will be lifted off from mankind and shifted to the next big thing [...] Machines that run on Oil; Steam engines were soon to be outdated and chunked up in museums. The encroachment in Oil Transportation Beginning When it all began in the year 1859 (Shipping oil via Oil tankers), Oil barrels were invented, these were much similar to the barrels that were used to store and transport alcoholic beverages such as beer, and as a matter of fact some of the barrels used for Oil transportation were in fact empty whisky barrels. These Barrels had the capacity to carry 159 litres of Oil each and were considered quite dangerous at that time due to the fact that they could leak and put the whole ship and its crew in jeopardy. (Encyclopedia Britannica) After that due to the constantly growing demand of Oil and the riskiness of oil transportation through barrels, the very first ships were created in the year 1863 which contained in built containers that were to be used to store Oil. These container ships usually had 4 built in tankers beneath the deck of the ship, but very soon these did not only carry Oil in their in - built tankers, but also carried Oil in barrels, which were placed where ever the place seemed fit. Figure 1: 1863's Ship with inbuilt Oil Containers (Wikimedia) But it was not until 1886 that the term Oil tankers was coined when a huge ship (well [...] huge for that time) with a total carrying capacity of 3,500 dwt was built, this ship was not only much larger in size than any other ship but had a carrying capacity which was about 7 times higher than its ancestors. This ship was called the “purpose built oil tanker” and had about 8 large compartments that could be used to carry Oil, although the ship itself used to run on Steam power. The Next Revolution But all these tankers were soon to be out numbered by newer and better tankers that had a dwt capacity which was far more than the “multi purpose built oil tankers”. The innovativeness for newer and better tankers was proposed by Mr. Daniel K. Ludwig who is possibly the oil tanker pioneer of this world. In the year Mr. Ludwig proposed to help build a new design of oil tanker that could carry up to 18,000 dwt of Oil. Of course Mr Daniel’s innovation paid off and most of the Oil tankers were upgraded based on Mr. Ludwig’s plan, but Daniel did not just stop there, he continued to pioneer in the Oil shipment business by constantly providing newer and much better ships in the markets. His next step was to create a ship that could easily carry 24,000 dwt of Oil, surprisingly Mr. Daniel succeeded in developing that too. And soon after that in the year 1953 Mr. Daniels unpredictably launched yet another ocean liner that could easily carry 38,000 dwt, at that point of time it was clear that Mr. Daniel will continue to trigger more innovations in this industry and they were proved right thrice when in 1955 he launched a yet another model that could bear 56,000 tonnes (dead weight tonnes), in 1956 a yet another ship which could carry an amazing 106,000 dwt with ease (these began to be called as super tankers), and finally 20 years later after his last innovation in the shipping industry, Mr. Daniels gave us yet another new astonishing development in the field in 1976 when he launched the ULCC (Ultra Large Crude carrier) which could carry an amazing 327,000 dwt. In Our Day The ULCC’s today are equipped enough to carry a weight up to 549,999 dead weight tonnes. These amazing innovations in tankers are what lead to the emergence of a new name for Mr. Daniel K. Ludwig, and that fame was him being called a “tanker pioneer”. Mr. Daniel had splurged his whole life on Oil tankers, and the innovations that he gifted this world with are still under current exercise and no one has been able to outdate them. (Wijnolst) The first Oil tanker to carry over 500,000 dwt was created in 1976, this Oil tanker was named Batilus and had a capacity of 556,000 dead weight tonnes. Its Length was 412.2 meters and breadth was 63 meters. Batilus also gave birth to all the modern ULCC tankers that we see today with the carrying capacity almost similar to that of the Batilus. Performance Benchmarks and S-Curve Limits Most of the many performance banchmarks of Oil transport industry via the Oil tankers have been derived by Mr. Daniel Ludwig (as also mentioned in the previous segment of this report). It was Mr. Ludwig who help innovate Oil tankers so as to expand their capacity from a mere thousand dwt to hundreds of thousands dead weight tonnes. Here are a few important benchmarks of the innovation in shipping in Oil transportation segment: At the Outset (1859 – 1886) Initially Oil was transported through empty barrels of whisky and rum, each of these barrels had a carrying capacity of 159 litres of Oil. After that once the demand of Oil grew even further and whole fleets had begun to be booked particularly for the supply of Oil, safer and better ships were created so as to exclusively transport Oil, these were possibly the very first Oil tankers of its kind, but had limited carrying capacity (ranged from 416 dwt to 3500 dwt, era: 1863-1886) This menial capacity was fair according to the slack demand (as compared to the demand today) in those days and the size of ships grew as the demand for Oil increased. It was not long until Oil completely replaced Old, slow, risky, and outdated technologies such as steam engines; and once this happened the demand for Oil grew so tremendously that it changed the definition of Oil transport, these ships became to be known as insignificant as newer, bigger, and better ships came and took over the markets and soon the whole Oil shipping industry. Subsequent Advancements (1886 – 1980) These were the times of extreme innovation in this particular segment of shipping as more and more advanced fleets were innovated, this era basically did not begin until early 1890’s, when Oil tanker innovation did not only concern the amount of Oil a vessel can carry in dwt, but this era was more concerned about the safety of the environment, crew, and the ship itself. Thus people began to search for newer ways to transport Oil without risking the environment any further as well as safeguarding ships and the bays on which it arrives. These concerns for the basic safety of the vessel lead to the engineering of the M. Samuel Murex, which got coined the first safe ship for Oil transportation, but had a carrying capacity of only about 5,000 dwt. It was built in 1892. This ship was built on the concept of cofferdams and ballast systems, which had provided the M. Samuel Murex extra stability, but had decreased the dwt according to its bulky size. All was forgiven when similar ships were now granted access to locations such as various canals because of its safety measures. Diesel Tankers Soon after all the safety measures were taken to safeguard a ship a newer technology in oil shipment business emerged, this was the birth of Oil tankers which were operated by oil itself, although these were costlier to run, but from the speed and safety viewpoint, these were much better ships as compared to the old steam runners. “Vulcanus” was created by the Dutch and was the first Oil powered tanker. But it had a lower carrying capacity and only carried Oil up to 1200 dead weight tonnes. This was quite low as compared to its other steam based rivals. After the success of the ships based on Oil it was again time to consider further safety in the Oil shipment business, as Oil was a highly inflammable substance, thus the new and revolutionary “Twin Bulkhead” tanker was created. Although this was much safer than the previous tankers used in ships, but it had a far lower oil carrying capacity but was an extreme success as it was deemed as the safest way to transport oil across any continent. Era of the Ludwig (Wijnolst) Daniel K. Ludwig was nick named as the Tanker Pioneer; this was possibly due to the fact that Ludwig had managed to come up with possibly the most innovations in the oil shipping industry, it was Ludwig that helped increase the tonnage carrying capacity of Oil tankers from 5,000 dwt to an astounding 327,000 dwt. Ludwig came under lime light when in 1940 he innovated a way to engineer an oil tanker that could carry up to the capacity of 18,000 dwt, after that in 1953 Ludwig again proposed a blueprint to create a ship with 38,000 dwt, and based on the same concept very shortly in 1956 Ludwig engineered a whole new dimension in the shipping industry by providing the world with a ship that could carry 106,000 dead weight tonnes which came to be known as the first “Super Tanker”. After that in 1976 Ludwig was the man that presented the world with the next big innovation in the Oil shipment industry by giving us the first ULCC (Ultra Large Crude Carrier). This changed the whole meaning of Oil shipment and the ULCC Oil tankers became the largest existing machinery on this planet. Other Innovations Around the Ludwig era that lasted from roughly 1940’s – late 1980’s, many other innovations in the Oil Shipment industry also took place. For example the very first VLCC (Very large crude carriers) were built during this era, the very first VLCC was brought to this world by Idemitsu in 1966. Basically VLCC’s had a carrying capacity of around 300,000 dwt; under most circumstances it was lower than 300,000 dwt. All the tankers above this capacity were coined as ULCC’s. Figure 2 (HOFSTRA) The ULCC’s are still the largest existing ships on the waters of earth. The largest ULCCs ever built have a carrying capacity worth over 550,000 dead weight tonnes. S – Curves Figure 3: S-Curves (Wijnolst) Innovation Targets There have been inadequate innovations in the oil transport and shipping industry since after the mid 1980’s, as you may notice in the diagram below that the ships with the highest dead weight tonnes capacity (around 550,000 dwt) were constructed around 1975 – 1980 period. Figure 4 OIL TRANSPORT SHIPS CONSTRUCTED (Wijnolst) Although ships with larger capacity were not constructed that does not mean that the demand of petroleum products had declined. As a matter of fact, the demand was higher than ever during those days. But the basic fundamental of innovation was shifted towards a new direction at that point of time. The new mania was not in constructing ships that had a higher dwt carrying capacity, but the new issue was to create ships that could be more secure, slimmer, and a lot more safer than the previous ships, this was not only supposed to ensure the safety of ships and its crew, but this would also mean that newer canals would give permission to such ships to pass through them. This new craze in the oil tanker innovation period allowed many new routes for the new generation ships and thus this trend led to the increase in Oil trade. The latest challenge before the oil tanker pioneers and engineers was not to create a ship with a larger carrying capacity, but to create a ship that could easily carry a couple hundred thousand dead weight tonnes and have a sleeker, slimmer, and an undersized kind of appearance. As a matter of fact, this is the trend in oil tanker innovation that is yet to run out, even today this world is still trying to bring about newer routes, except that we cannot possibly “find” any new routes, as unlike earlier times, there are no “undiscovered” or “novel” locations on this planet. The challenge is to cut about newer routes, create newer routes, etc. And the major challenge is to get these massive chunks of machinery to all the possible locations that need Oil or are a prominent supplier of Oil. The largest short coming of an oil tanker is that it is not possible to transport Oil via the help of oil tankers everywhere, due to the lack of tracks or connectivity to oceans of every location. This is the reason why many of the prominent Oil drillers such as Middle East have shifted to a possibly even cheaper means of Oil transport, which is transportation by the means of Oil Pipelines; these are similar to gas pipelines, only much larger but less secure. Although some experts believe that Oil pipelines are much more costlier in the longer run, are not safe at all, based on the belief that they are an easy target for terrorists, and finally these pipelines are definitely a big load on the government’s shoulders as the pipelines require small storage venues all along the way and many employees are required to run these smaller accumulation venues, not only that, but these venues are very risky and involve a complicated procedure every time Oil flows through their respective tubes. A recent controversy related to this is that Oil tankers will benefit when Global Warming takes a turn for the worst, this is due to the fact that the more the water covers land, the more room for these ships to travel, not only that but the water will also create many newer and shorter routes. This will not only enable us to reach newer destinations that were not reachable before, but the older destinations will also be reached pretty quickly, at least far more quickly than before. Generating Ideas Very recently, the Oil tanker industry is frequently under obligations by environment protection or anti global warming organizations such as green peace. Just the other day some Green peace delegates gave some trouble to an Oil tanker by not letting it pass through San Francisco, that is, the people from green peace completely occupied the Oil Tanker and did not let it take off. (Green Peace) These kind of bizarre situations are a huge hurdle for the Oil Tanker industry; primarily the Oil Tankers have to beat their more environment friendly rivals the “Oil Pipelines” and now this. Therefore for this report it was decided that instead of making the Oil tankers more large, more secure, or more spacious we will focus on what’s more important in the present epoch and the current affairs around which the Oil tankers are completely occupied are “Global Warming” and “environment friendliness”. Therefore an analysis was conducted on what could be the best environment friendly ideas used to run Oil Tankers. After all [...] everything else has already been created, discovered and innovated; the oil tanker innovators have even created Oil tankers that could easily break through Ice and pass through some of the frozen paths such as Greenland and Antarctica, they have created double hull ships, etc. Here are a few ideas that have been brainstormed for this particular report: Oil Tankers with Solar Panels: Solar Power is quite effective, but the only hurdle is that Oil Tankers would still have to run on Non renewable fuel during the nights and within colder regions. Besides that, tremendous amount of Solar power would be required to run a whole Oil Tanker. Water Engines: The theme of the 21st century completely focuses on Water Engines, very recently (within July) Honda launched their new engine that runs solely on Hydrogen, which is very easily extractable from water, and at around the same time another Japanese company launched their new car that runs on any kind of water (salt, natural, rain, etc.). These kind of reports have made us believe that someday their might be a possibility to run these Oil Tankers with the help of Water. Hybrid Oil Tankers: The hybrid technology is what we like to call Fuel + Battery, that is, the hybrid Oil Tankers will be capable of running on Batteries also, plus they will also be able to run on fuel, as they will run on fuel the batteries will also get charged. But unfortunately this idea is of no application in case of Oil tankers as Batteries are not only very typical and minute in comparison to Oil, but also very heavy in terms of weight. Batteries might increase the dwt by tonnes if applied. So we have rejected this Idea. Innovation Case Study An introduction The 21st Century is all about power saving and conserving Oil, although the question “Are we about to run out of Oil?” has already arisen quite many times in the past, to be precise this controversy of Oil shortage was primarily in full swing in about 1973 (this was also the time when the Oil prices began to rise tremendously) because Oil was declared as soon to be perished product. But very recently since soon after this Millennium, the “less consumption of Oil” issue is not just about “the end of Oil”, but this has expanded itself to another huge issue which turns out to be even larger than its predecessor “the end of Oil” issue and this rival novel issue is “Global Warming” and higher levels of Carbon Dioxide in the atmosphere. How do Oil Tankers become “Illicit” in this issue? Oil tankers along with being the best possible source of Oil transportation are also huge gas guzzlers. Thus environment protection activists have declared them as potential targets for their several missions to possibly “save planet earth”. The Innovation A great idea would be to create an Oil tanker based on Solar Energy. This suits best amongst the select 3 because of the following facts: Oil tankers always travel in the open where there is plenty of sunlight. Due to Global Warming, heat is at its peak and so is sunlight from the sun, so this is yet another way global warming is proved useful for Oil Tankers besides creating multi path ways. Solar energy is a field which is beginning to advance, as now a day’s water heaters, cars, and almost everything is being run by Solar Power. Thus we feel that Solar Power might possibly be the best source of energy for these giant machines, but then again, Solar Power might not be able to generate a large amount of Power, plus the safety concerns with solar cells and so much Oil on board the ship has not been analysed. And even though the ships began to run via solar power, they would still need fuel energy to be able to run in the nights and cooler areas of this planet. Besides a lot of Solar Cells would be needed to run a piece of machinery that’s that big. But still this idea suits perfect as scientists have already fitted solar cells in just about everything. Another great combination could be Solar Water heaters and Steam Power to run these ships. This would be based on the typical Steam Engine design, only instead of coal, solar cells could be used t heat up the water up to the required levels and the ship would run on Steam, just like they used to in the 1800’s. So this is just like bringing back the good old times with a few modern glitches. In terms of Cost, there is no saying as to how much money these Oil tanker companies will save by cutting down on fuel, this could not only decrease the prices for these companies but all of the world could also benefit by the means of low cost oil as a result of lower transportation costs. Works Cited Encyclopedia Britannica. Barrel. London: Britannica, 2005. Green Peace. “GREENPEACE OCCUPIES OIL TANKER IN SAN FRANCISCO BAY, WARNING THAT GLOBAL WARMING IS THE NEXT OIL DISASTER.” Climate Press Release (1999): 1-2. HOFSTRA. http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/img/tankers.gif. 15 June 2001. 20 July 2008 . Simoes, Jorge Tavares de Carvalho. SADCC: Energy and Development to the Year 2000. Uppsala: Nordic Africa Institute, 1984. Valsson, Trausti. How the World Will Change with Global Warming: With Global Warming . Chicago: Global Warming, 2007. Wijnolst, Niko. Innovation in oil tanker shipping. PhD Thesis. London: Cass Business School, 2007. Wikimedia. Oil tanker Side view. 13 January 2005. 17 July 2008 . Bibliography HSimoes, Jorge Tavares de Carvalho. SADCC: Energy and Development to the Year 2000. Uppsala: Nordic Africa Institute, 1984. Valsson, Trausti. How the World Will Change with Global Warming: With Global Warming . Chicago: Global Warming, 2007. Wijnolst, Niko. Innovation in oil tanker shipping. PhD Thesis. London: Cass Business School, 2007. Read More