The Terminal Operations Conference & Exhibition
1-3 June 1999
ZIM'S APPROACH IN SERVING
CAPT. YIGAL MAOR
|B.||ZIM AND IT'S TENETS
|C.||THE HUB'S ATTRIBUTES
|D.||ZIM'S ACTIVITY IN THE MEDITERRANEAN
|E.||FUTURE TRENDS IN MEDITERRANEAN PORTS
Beyond the basic investment's determination by a shipping company
before and while operating any service line, the main issue is
the attributes of the line in the geographical aspects.
Said geographical coverage, is a direct result of the investment
- namely: number of vessels, their size, speed and frequency of
calls - all those attributes which will compose the quality of
the said service.
If assuming that the frequency of call is a weekly one (expected
norm by most of markets) and assuming also that vessel's size
and speed were determined as well (investment limits), it is clear
the rotation of that line and number of ports of call is a known
and determined factor.
Investment extent, resulting in vessel's size, limitations, and
the schedule constraints are certainly different between each
carrier - thus affording the vast diversities of shipping services.
The clear tenet that guides all carriers as service providers,
is the geographical coverage, namely widest spatial extension
to service optimized size.
This is the base for the complicated and branched feeder network
that completes the line's service spreading.
The basic assumption that the main liners skeleton is quite a
rigid one (concerning vessels' limitation, endless efforts to
minimize costs and schedule constraints), leads to the clear conclusion
- that a line flexibility is depending on its feeder services.
Carrier's ability to vary the said line, beyond significant strategic
changes, is by adding feeder services.
Feeding services allowing carriers to penetrate into specific
markets considering also that further follow up will inquire and
maybe justify future call by the main liner in case of market
The integration of Zim's lines and the mutual feeding and lines'
activity in Zim's system will be introduced by focusing on Zim's
activity in the Mediterranean. Ideas about the future trends in
the Mediterranean port activity, will also be discussed.
B. ZIM AND IT'S TENETS
Zim is today one of the world's main container carriers.
The idea behind Zim's organization and its activity is the continuing
improving of its position as an integrated international transportation
According this concept, Zim laid out a global network based on
herringbone of two east/west bound pendulum services.
The ZCS (Zim Container Service) and AMD (Asia Med), services which
initiate their routes in the Mediterranean east and west bound,
meeting in the far east, swing and complete their voyages again
in the Mediterranean.
This concept was described by the "Containerization International"
as one of the most significant corner stones and breakthroughs
in the containerization development through the last 40 years.
In certain hub points, along the main east/west services, south/north
services are joining the main strings, completing Zim's worldwide
The idea behind this intricate structure is minimizing risks and
costs, while allowing penetration to world wide niche markets.
Zim's main objective is a constant diligence in improving its
position as a leading global transportation company.
This objective is supported among others by continuous efforts
to improve the ability of responding to market demands - objective
that is one of the major factors in Zim success.
Zim is looking forward to entering new markets that complement
its existing routes' structure.
Zim believes that the diversification of its markets stabilize
its presence in major trade areas while minimizing risks.
Objectives mentioned, as well as others, are being achieved by
Zim's strategy, which is guided under the following points:
- Increasing and improving geographical coverage of its route
network including main lines and diversity of feeding services.
- Upgrading Zim's services wherever practicable to weekly combined
services mutually connecting each other.
- Operating a self-owned core fleet. This will assure flexible
and reliable operations in the unstable and fluctuating contemporary
global shipping market.
- Continuous evaluation of global trades and Zim's presence
and reaction to changes mainly concerning service level, tonnage
involved and all needs for constant rationalization of routes
- Zim is constangly seeking for a strategic partnership as well
as expanding its co-operations with other shipping companies.
Zim is ready to consider entering new joint ventures with other
- Ever lasting improving efforts towards its clientele by offering
a more personalized and competitive services.
Zim is working under the Iso 9000 certification, constantly monitoring
its level of service and trying to improve it.
Beyond the global approach and regarding the Mediterranean, Zim
is considering the Med as a cornerstone for its European services
and the junction point for most of its services.
Israeli ports the homeports for Zim's vessels, are located in
the eastern Med, and creating the said junction point.
Zim's activity in general, is about 50% of the container activity
Zim - as a shipping company, was born in the Mediterranean. From
the Mediterranean, Zim emerged and developed its present reputation
as a dynamic world-spanning container shipping service operating
between Israel, its homeport, east and west bound until the Far
East and back.
C. THE HUB'S ATTRIBUTES
A port as a HUB in its known developed form of today, is a relatively
new phenomenon in the shipping market. A direct result of economical
and operational dynamics and processes in the container trade
development over the last 40 years.
The augmentation in ships' sizes, the essential requirement to
rationalize the voyages by shortening berthing time and skipping
ports (not fitting lines frame of time and production expectations),
the vast changes in the operational, logistic and economical aspects
of the port industry, all together created and cherished the transshipment
phenomenon as known today.
The creation and development of hub centers depend on the demand
and the nature of their surrounding markets, and according to
carriers' demands in their endless efforts to upgrade and improve
their services as offered to their clientele.
Such changes must be accompanied by improving their performances
in the economical and operational aspects.
In general, HUB port can be determined by integration of some
Among them are:
- The size and the ratio of transshipment activity to local
- Activity development in the said port, compared to the local
- Type and size of vessels calling the said port, compared to
local market's needs.
The requirements from a certain port to become a HUB are diverse
and quite complicated.
The diversity of parameters can be divided into the economical
and the operational aspects.
The economical aspect:
- Existence of a basic local market that will contribute to
the call costs.
- Attractive tariffs and costs that will justify and enable
the future expected developing of activity.
- Ports' capability to further future growth - regional market
potential, economical and spatial potential for further expansion
of the port and its logistic systems.
In general - all attributes which will assure the future stabilization
of the port and services.
The operational aspect:
The spatial location of the port - which will minimize any possible
deviation from main sailing route, obviously resulting from the
essential need to shorten voyage and avoiding any unnecessary
The proximity of hinterland market by unalloyed geographical and
logistical meanings. There is the essential need for branched
and reliable logistic systems - maritime and terrestrial as well,
to assure high level service to carriers' clientele - and on the
other hand, minimizing costs.
Industrial peace which will assure fluent and reliable port operatins.
High quality and productive operations which fit the modern vessels
nature. Production by rate of operations, efficiency of cargo
flow all year long - which will be generated by infrastructure
extent and appropriate berth utilization percentage to avoid any
queuing and respected delays.
D. ZIM'S ACTIVITY IN THE MEDITERRANEAN
D1. MAIN GLOBAL STRINGS IN THE MED
Zim's 2 main world embracing services, ZCS and AMD are converging,
initiating and completing their voyage in the Mediterranean.
The multi directional convergence point in the east Mediterranean
is the port of Haifa.
AMD service, after calling Israel, is performing its Mediterranean
loop that consists of Egypt, Greece and the Adriatic Sea ports.
This loop provides on top of AMD's direct calls to those ports,
a reliable and high quality service to the Israeli market with
its unique demands and limitations. In addition, as part of its
aims, the loop provides feeding services to the ZCS and other
lines that are converged at Haifa.
ZCS service completes its voyages in Haifa, connecting and feeding
east Mediterranean ports with the west Mediterranean range.
From Haifa, after initiating its voyage, ZCS vessels call Livorno,
ZCS main port of call in Italy, and then proceed to Barcelona,
the Zim's west Mediterranean hub center.
D2. SECONDARY LINES IN THE MEDITERRANEAN
The secondary lines in the Mediterranean, like the main strings,
operate under two concepts:
- Serving the Israeli trade with its unique imitations and demands.
- Presenting feeding services to the main lines in the Mediterranean.
In the frame of those services, Zim is also active in the inter-med
trades such as the West Mediterranean loop, connecting Italian
ports with Spain, France and Portugal with a weekly, fix day service.
Those services, as well as the global services in the Mediterranean,
are exchanging between themselves the role of feeder and main
These, in order to offer the best and highest level of service
to most of Mediterranean destinations and origins.
D3. MERGING OF ZIM'S SERVICES IN THE MED
Efficiency and rationalization are the keywords in creating the
intricate branched structure of Zim's network in the Mediterranean.
In this structure, all lines feed each other and assure high level
of service to the Israeli and international clientele.
D4. ZIM'S FUTURE PRESENCE IN THE MED
Zim, as in the past, is continuing in its endless efforts to diversify
and improve its services by calling and covering most of Mediterranean
markets on a weekly basis. The never-ending search for optimizing
services in favor of Zim's clientele, is the main guideline in
the Mediterranean activity. The Mediterranean will continue to
be Zim's corner stone for its national and international trades
due to the clear recognition of the Mediterranean basic economical
significance also in the global aspects.
Future trends as will be mentioned, are carefully studied and
monitored for proper reaction to any market demands.
E. FUTURE TRENDS IN THE MEDITERRANEAN
There is a diversity of theories and articles regarding future
trends in the spatial distribution and roles of the Mediterranean
The growth of vessels capacity, schedule rigidity, the economical
effects of each delay and deviation will most probably continue
to dictate hubs' concentration along the direct Suez - Gibraltar
The pressure, quantities and character of the Europe-Asia market,
probably, will also continue to dictate the need for north Europe
direct call - thus continuing to serve the Mediterranean via few
The influence of Mediterranean ports owing to any change in the
north European ports', congestion and/or saturation, is quite
However, Europe's logistic constraints are well known for their
influence on any situation.
Hub centers along the Mediterranean Sea, known or anonymous, will
concentrate mainly on transshipment activity. Their ability to
confront transshipment costs will inherent in their activity volumes
and their ability to rationalize and improve production as well
as offer carriers diversity of added values' services - mainly
in the logistics aspects - marine and terrestrial as well.
Carrier's choiche of one hub center or another will depend also
in the future, beyond the geographical aspects, on the logistics
attractiveness as well as costs.
The issue, can not be clearly defined, few theories if any succeeded
in predicting the establishment and the momentum of Gioia Tauro,
Genoa's complex trade development and recent years levels, were
almost unforeseen and many more.
There are some present clear processes in the Mediterranean.
Starting with ending conflicts in the Eastern Mediterranean through
accelerated developments of urban centers such as the Po valley
in north Italy and ending with privatization waves and taking
over of ports by global consortiums.
Long range wealthy development plans for ports such as Cagliari,
Taranto and other East and West Mediterranean ports, are very
significant for those ports as well as for adjacent ports which
are trying to understand, predict and adapt new strategy for seen
North European ports' growth rate, and the inevitable future saturation
of some terminals, will have their significant influence as well
on Mediterranean ports and the formation of the future Mediterranean
It is obvious that processes mentioned might cause considerable
changes in the Med trades' patterns such as moving transshipment
center of gravity further east of today's situation.
Some of today's well-known and established ports might fade in
front of some new and presently anonymous ports that will benefit
from their spatial position and future wealthy investment.
The known fluctuating due de-concentration processes in saturated
ports will also be seen in the future and most probably will continue
to characterize traditional Med ports' activity - mainly due to
lack of expanding spaces.
The intermodal issue - an increasing problem in Europe, is another
Known congested roads, old railways systems, safety and ecological
aspects, and the vast investments required to face the problems,
will undoubtedly contribute to a significant growth in sea transportation
and ports activity in seen future.
Vast sizes of urban centers and their population needs - consuming
and industrial aspects as well, will need to develop an appropriate
logistic system to correspond their demands.
F. FINAL REMARKS
The nature and the activity of a port as a hub are resulting from
the carriers' strategy.
However, it should be noted that the attractiveness of a hub,
beyond its natural attributes, depends also on its operators'
As previously mentioned, some attributes which build the hub's
attractiveness, can be determined, but a total model that will
predict the future - is by far to be achieved.
In spite of the uncertainty, few possible trends in the Mediterranean
can be observed.
As mentioned, Mediterranean ports feeding North Europe are hard
to be excepted. As well as opposite theories.
The present situation of the European terrestrial logistic systems
blocks and will block all initiatives unless completely revised.
Political processes - mainly in the Eastern - Med should be carefully
monitored for possible changes in all the Mediterranean trade
There is a diversity of future scenarios and hubs charts for the
Mediterranean. Carriers also evaluate future changes for adequate
spreading of their network.
However, in spite of any future changes, carriers will continue
facing heavy pressures to reduce their costs. This can be achieved
only by further rationalization of ports and logistic systems.
Secondary ports, which met feeders' activity, today serve feeders
of main liner sizes that need top quality service to fit into
the complicated schedules of the main liners.
Lost identity in some cases between the main liners and the feeders
as shown in Zim's case, requires same terminal service levels
for the feeder as well as the expensive main liner.
With today's tremendous fixed costs, queuing in front of terminals,
strikes and any other operational bottlenecks should be completely
eliminated in order to overcome both operators' and carriers'
marginal profits in their vast investments.
All these arguments, should be taken into consideration by terminals
when evaluating or arranging themselves for future developing
or upgrading their services.