{"id":132484,"date":"2022-10-20T00:00:00","date_gmt":"2022-10-20T00:00:00","guid":{"rendered":"https:\/\/nursingstudybay.com\/2022\/10\/20\/an-analysis-of-multimodal-route-via-iraq-to-the-mediterranean-and-europe-compared-to-the-suez-canal\/"},"modified":"2022-10-20T00:00:00","modified_gmt":"2022-10-20T00:00:00","slug":"an-analysis-of-multimodal-route-via-iraq-to-the-mediterranean-and-europe-compared-to-the-suez-canal","status":"publish","type":"post","link":"https:\/\/www.studyproessays.com\/help\/an-analysis-of-multimodal-route-via-iraq-to-the-mediterranean-and-europe-compared-to-the-suez-canal\/","title":{"rendered":"An Analysis of Multimodal Route via Iraq to the Mediterranean and Europe compared to the Suez Canal"},"content":{"rendered":"

An Analysis of Multimodal Route via Iraq to the
\nMediterranean and Europe compared to the Suez
\nCanal<\/p>\n

Abstract
\nTitle of dissertation: An Analysis of Multimodal Route via Iraq to the
\nMediterranean and Europe compared to the Suez
\nCanal.
\nDegree: MSC
\nMultimodal transport contributes significantly to the concentrations of international
\nand domestic trade. There are several competition means, by which the different
\nmodes of transport perform to attract more cargo to be moved. The users of
\nmultimodal transport are concerned about its cost effectiveness and the level of
\nservice provided by these modes. In most cases, sea transport is the cheapest mode of
\ntransport compared with air, road and land transport, but it takes longer time due to
\nthe ship speed and time spent in ports. Canals can act as bottlenecks for sea transport
\nthrough increasing transit time, limiting the vessel size and high canal dues, which
\nincrease transport cost.
\nThe dissertation analyzes the possibility of introducing an alternative multimodal
\ntransport to the Suez Canal route in order to ascertain the competition between them.
\nBy calculating transport costs for the existing and proposed routes, the Suez Canal
\nroute has advantages in terms of cost effectiveness, environmental friendless and
\nbeing more certain in the current situation for international trade between Europe and
\nAsia. Another detailed analysis was carried out to evaluate the significance of the
\nnew route to the Middle East and Arabian Gulf countries. It discussed the potential
\nbenefits and contributing of the new multimodal route to the economic growth of the
\nregion, particularly in Iraq and Syria. The efficiency and reliability of the new route
\nare the conditions for increasing its competitiveness and attractiveness in the long
\nterm. Further, the crude oil transport by pipelines from the gulf countries to the
\nMediterranean for transshipment to Europe and the US is a cheaper and greener
\ntransport system than the existing one.
\nKey Words: Multimodal transport, cost effectiveness, Suez Canal route, analysis,
\neconomy growth, transport efficiency and reliability.
\nv
\nTable of Contents
\nDeclaration\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… ii
\nAcknowledgements \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 iii
\nAbstract \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. iv
\nTable of Contents \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 v
\nList of Tables \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. vii
\nList of Figures \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. viii
\nList of Abbreviation \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. ix
\nChapter 1 Introduction \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026…1
\n1.1 Background \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..1
\n1.2 Significance of the Research\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.2
\n1.3 Research Objectives and Scope \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u20263
\n1.4 Research Methodology \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.4
\n1.5 Limitation of the Research \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u20266
\nChapter 2 Literature Review \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..7
\n2.1 Port and Route Selection \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..7
\n2.2 Multimodal Transport \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026…11
\n2.3 Alternatives to the Suez Canal \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..13
\nChapter 3 Selected Existing Multimodal Transport Systems \u2026\u2026\u2026\u2026\u2026\u2026..15
\n3.1 The land bridge in the US \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.15
\n3.2 Trans European Transport Network TEN-T \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.18
\n3.4 Trans Siberian Railway TSR \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202624
\nChapter 4 Distance and Cost Comparison between the Suez Canal and New
\nRoutes \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202628
\n4.1 Distance \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 28
\n4.2 Transport Cost and Freight Rate \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. 33
\n4.2.1 Sea Transport Cost \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 33
\n4.2.2 Inland Transport Cost \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202639
\n4.3 Crude Oil Transport \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 43
\n4.4 Suez Canal Capacity and Efficiency \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 45
\n4.5 Regional Integration and Crossing Borders \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 46
\n4.6 Port Efficiency and Cargo Handling \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 48
\n4.7 Factors influencing the Competition with the Suez Canal \u2026\u2026\u2026\u2026\u2026\u2026… 49
\n4.7.1 Security Concern \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 49
\n4.7.2 Environmental Concern and Air Pollution \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.51
\n4.7.3 Economies of Scale \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 54
\n4.7.4 Bunker Prices \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 55
\nChapter 5 Analysis of the Significance for Iraq of the New Route \u2026\u2026\u2026\u2026..56
\n5.1 Transport Cost for Trade between Iraq and Europe \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.56
\n5.2 Current Situation of Iraqi ports and approaches\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202658
\n5.3 Identification of Bottlenecks for Iraqi Transport System \u2026\u2026\u2026\u2026\u2026\u2026\u2026 61
\n5.3.1 Port Accessibility and Safe Navigation \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 61
\n5.3.2 Land Transport Network System \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… 64
\nvi
\n5.3.3 Port Capacity and Performance \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. 65
\n5.3.4 The Current Security Situation \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… 68
\n5.3.5 Red Tape Procedure and Corruption \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 69
\n5.4 Increasing Demand for Transport \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 70
\nChapter 6 Conclusions and Recommendations \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. 76
\n6.1 Conclusions \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 76
\n6.2 Recommendations \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 81
\nReferences \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.83
\nvii
\nList of Tables
\nTable 4.1 The distance comparison between existing and new routes (via Iraq and
\nSyria) \u2026\u2026\u2026……………………………………………………………………………… 29
\nTable 4.2 The distance comparison between existing and new routes (via Iraq and
\nTurkey) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u202631
\nTable 4.3 Freight Rates of Carrying a FEU from Dalian in May 2010 \u2026\u2026\u2026\u2026\u202636
\nTable 4.4 Economic of Scale in Bulk Shipping (including bunker) \u2026\u2026\u2026\u2026\u2026\u2026.37
\nTable 4.5 The operation and bunker cost for three types of vessels \u2026\u2026\u2026\u2026\u2026\u2026.38
\nTable 4.6 Total cost of sea transport via Suez Canal for different vessels \u2026\u2026\u2026\u202639
\nTable 4.7 The combined cost of Sea\/Land transport \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.41
\nTable 4.8 Cost comparison for cargo transport through two route options \u2026\u2026\u2026.. 42
\nTable 4.9 CO2 emission comparison between existing and new routes \u2026\u2026\u2026\u2026\u202652
\nTable 5.1 Iraq’s top 10 export and import trading partners, 2003 \u2026\u2026\u2026\u2026\u2026\u2026\u2026. 56
\nTable 5.2 Transport cost comparison for trade between Iraq and Europe \u2026\u2026\u2026\u2026 57
\nTable 5.3 Maximum and average ship sizes called port of Um Qasr in 2004 and
\n2005 \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..62
\nTable 5.4 Iraq’s GDP growth estimates \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.71
\nTable 5.5 Estimated total passenger flows at governorate level (number of passengers
\nper day) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.72
\nTable 5.6 Distribution of forecasted inbound passenger flows in 2015 \u2026\u2026\u2026 73
\nTable 5.7 Estimated growth of cargo export from Iraq to different regions \u2026\u2026\u2026. 74
\nTable 5.8 Estimated growth of cargo import to Iraq from different regions \u2026\u2026\u2026 75<\/p>\n

viii
\nList of Figures
\nFigure 3.1 The North American Land bridge \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 15
\nFigure 3.2 Comparison of major modes in the US \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 16
\nFigure 3.3 Trans European transport network TEN-T \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 20
\nFigure 3.4 Trans Siberian Railway TSR \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 26
\nFigure 3.5 Price fluctuation: TSR vs. Deep sea transport \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… 27
\nFigure 4.1 First option of proposed route \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… 28
\nFigure 4.2 Second option of proposed route \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. 30
\nFigure 4.3 The Viking Intermodal train project ( help with nursing paper writing from experts with MSN & DNP degrees) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 32
\nFigure 4.4 Increasing growth of transport by Viking train \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 33
\nFigure 4.5 General cost classification for Bulk Carriers \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. 34
\nFigure 4.6 The number of piratical attacks divided by regions 2009 \u2026\u2026\u2026\u2026.. 50
\nFigure 5.1 Location of major ports in Iraq \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026… 59
\nix
\nList of Abbreviation
\nAHP Analytic Hierarchy Process
\nBC Bulk Carrier
\nC.I.I.T.I Italian Consortium for Iraq Transport Infrastructure
\nCIF Cost, Insurance and Freight
\nCO2 Carbon Dioxide
\nCV Container Vessel
\nDWT Dead Weight Tonnage
\nEASA European Aviation safety Agency
\nEDI Electronic Data Interchange
\nEMSA European Maritime Safety Agency
\nERA European Railway Agency
\nEU European Union
\nFEZ Free Economic Zone
\nFMCDM Fuzzy Multiple Criteria Decision Making
\nGC General Cargo
\nGCPI General Company for Ports of Iraq
\nGDP Gross Domestic Product
\nGHG Green House Gases
\nGPO Global Port Operator
\nGT Gross Tonnage
\nGvt Governorate
\nH&M Hull and Machinery
\nIMB International Maritime Bureau
\nIMO International Maritime Organization
\nIOM Iraqi Oil Ministry
\nIMOP Iraqi Ministry of Planning
\nIRR Iraqi Republic Railways
\nISPS code International Ship and Port Facility Security Code
\nJBIC Japan Bank for International Cooperation
\nJIT Just In Time
\nkm\/h Kilometer per hour
\nMARPOL Marine Pollution Convention
\nMT Multimodal Transport
\nNM Nautical Mile
\nNOx Nitrogen Oxides
\nP&I Protection and Indemnity
\nRORO Roll On Roll Off
\nSC The Suez Canal
\nSCA Suez Canal Authority
\nSECA Sulphur Emission Control Area
\nSOx Sulphur Oxides
\nTEN-T Trans European Transport Network
\nTEU Twenty Equivalent Unit
\nx
\nTSR Trans Siberian Railway
\nTTI Taxas Transport Institute
\nUK The United Kingdom
\nULCC Ultra Large Crude Carrier
\nUNCTAD United Nation Conference on Trade and Development
\nUNDP United Nations Development Programme
\nUS The United States of America
\n$ m p.a Million US Dollars per Annual
\nWMU World Maritime University
\nWTO World Tourism Organization
\nxi
\nChapter 1
\n1. INTRODUCTION
\n1.1. Background
\nToday, the maritime industry is a major component of an integrated economy,
\nmaking up a substantial part of every country’s GDP and national employment.
\nTraditionally, this industry in every country has established its unique advantage of
\ncompetitiveness due to its domestic demand and location in the international market.
\nHowever, with the globalization of the world economy and international market
\nformalization, the maritime industry faces double pressure from other modes of
\ntransport and the change of demand.
\nThe alteration of the market situation is the main dominating element of transport
\nneed. Although sea transport has moved most cargo in terms of volume and value,
\nthe modal shift of transport has been dramatically growing especially over short
\ndistances for cargo when the advantages of economies of scale do not have a big
\neffect on transport cost. Moreover, the reduction of the environmental threats by
\nmultimodal transport (MT) encouraged the diversification of transport modes. Since
\nthe market is always changing according to development in different regions, the
\npotential ability of the Middle East and Africa to develop could dominate the future
\nmarket, which urges the hinterland connections to develop accordingly. The Arabian
\nGulf countries’ economies mostly depend on oil exportation which make them
\nrelatively comfortable but the depletion of oil reserves could be a future threat.
\nTherefore, to overcome such difficulties these countries should explore other sources
\nto generate their income (Valsson, 2006).
\nToday, ports and shipping are apparently interrelated with other relevant factors in
\nthe logistics and supply chain and an economically significant factor for
\ncompetitiveness in the shipping industry (Ma, 2010a).
\n1
\nThe strategic position of Iraq connects the Middle East with Europe via Turkey by
\nhighways and rail transport and with the Mediterranean via Syria and Jordan by
\nmultimodal transport. A new route has been proposed from Asia to Europe via the
\nArabian Gulf by constructing a new hub port in the north of the Gulf to be connected
\nby railway, highway and waterway connections with Syria and Turkey, which have
\nhinterland connections with Europe.
\nThe shipping lines are keen to use whatever routes that could be possible if they are
\ncost effective. Therefore, the new routes could be appropriate alternatives to the
\npresent one due to piracy threats and future market development. On the other hand,
\ndue to draft limits because of the sedimentation problems in the current ports of Iraq
\nand the long distance of the port approach, the new location of the port might have
\ngeographical advantages and competitiveness with regional ports in terms of
\nimporting and exporting cargo to increase the market share.<\/p>\n

Furthermore, the location of the new seaport project ( help with nursing paper writing from experts with MSN & DNP degrees) might have advantages due to
\nconsumption growth in the named region which will find a new industrial market
\nleading to manufacturing production centers. This dissertation will analyze the cost
\neffectiveness in order to draw conclusions on whether or not the alternative routes
\ncan compete with the Suez Canal in terms of cost, security (piracy) and the
\nenvironment. Moreover, it seeks to analyze the impacts of the new port on Iraqi\u2019s
\neconomy, especially with the new trend of development in transport infrastructure
\nand the country\u2019s trade.
\n1.2. Significance of the Research
\nPorts have a significant function for the national economy of a country due to the
\neconomic and social impact which is demonstrated by any country’s economy
\nincreasing by 1.4% when the port efficiency increases by 1% (Ma, 2010b).
\nThe demand for having a port for cargo and ships to import and export cargo
\nincreases in terms of services and facilities where the cargo is transferred from one
\n2
\nmode of transport to another. The most important elements affecting competition
\nbetween ports are as follows: port tariff, terminal throughput, market share, market
\nconcentration, port location, accessibility, port infra\/superstructure and hinterland
\nconnections (Carriou, 2010b). Ports have always been considered as vital gateways
\nfor the export and import of raw materials, semi-manufactured and manufactured
\nproducts from\/to different markets located worldwide, especially in industrial
\ncountries (UNCTAD, 1998).
\nThe increasing demand of trade between Asia and Europe due to globalization of
\ntrade, in addition to security problems related to piratical attacks in the Gulf of Aden
\nwill probably increase the waiting time of ships that use the Suez Canal. Therefore,
\nthe alternative route could be a competitor for the existing route in such sea transport.
\nIt is also hoped to attract more shipping lines to call the new deep sea port, which is
\nproposed to be constructed in the north of the Arabian Gulf to cope with the
\ndevelopment of Iraq as a logistic centre in the region.
\nThe new route can improve the economic situation for Iraq, Syria, Jordan and Turkey
\nwhich obviously will contribute part of these countries’ GDP from transport and
\nlogistics, which is considered trade improvement. The research took point of views
\nand benefits of both the ports and the shipping companies into consideration.
\n1.3. Research Objectives and Scope
\nThe dissertation will discuss the present situation of existing routes and the
\nadvantages of new routes for international trade and supply chains by analyzing their
\ncost effectiveness. In addition, the opportunities of a new concentrated market and
\nIraq’s economic benefits will be analyzed, as well as the selection of routes and ports
\nby shipping lines as these are the most important elements since they are the users of
\nthe new routes. Therefore, the research will analyze the available infrastructure for
\nIraq’s transport system and the cost of infrastructure of new multimodal transport in
\norder to demonstrate the probable advantages which could be acquired by ship
\n3
\nowners and cargo owners. Moreover, the environmental impact of the new route will
\nbe discussed in terms of gas emissions and the impact of new constructions on the
\necosystem and the life of organisms.
\nAn analysis of the present situation of the traffic in the Suez Canal will be carried
\nout with regard to the tendency of constructing bigger vessels in order to get benefit
\nfrom economies of scale which require deeper water and wider approaches, which
\nneeds considerable investment by the Suez Canal Authority (SCA) to cope with such
\ndevelopment. Finally, the dissertation provides comprehensive recommendations for
\nthe application of all requirements for a modern and efficient port that could improve
\nthe transport sector in Iraq and the country’s GDP.
\n1.4. Research Methodology
\nThe research adopted a qualitative study by approaching available data about the
\nmultimodal transport in the region. The methodology used for the purpose of
\nresearch was classified into three main methodologies: First, a literature review to
\nstudy previous researches which have been carried out by different authors and
\norganizations contributing to the importance of the topic (sample nursing essay examples by the best nursing assignment writing service) selection. Second, an
\nassessment of the current situation for existing routes between East and West
\n(Asia\u2194Europe) using annual reports of the Suez Canal and calculating the distance
\nof the new route as well as the old one and determining the operation cost for vessels
\nin both cases.
\nFinally, based upon data available about previous performance of Iraqi ports and the
\nobstacles that prevented them from development, an analysis of the past and present
\nsituation of the Iraqi transport system and anticipated growth of demand for cargo
\nand passengers was done. An assessment of the suitability of the transport system
\nwas also measured in terms of how much it could positively or negatively impact
\n(i.e. bottleneck) on the economic development.
\n4
\nThe research structure has been divided into six chapters in order to cover the scope
\nof the research. The first chapter reviews the background and introduction of the
\nproposed route, the significance of the research, the objective of the research, scope
\nof research, research methodology and limitation of the research. It concentrates on
\nhow the shipping lines are the decision makers about which route and port have the
\npreference to be chosen.
\nIn order to realize the decisive factors affecting the selection of port and route by
\ncarriers and shippers, a literature review has been carried out in chapter two. Further,
\nthe multimodal transport (MT) system definition and its consequence are covered in
\nthis chapter. Due to the role of MT in international trade and economy, many
\nliteratures were written. The dissertation explains the influential factors affecting the
\nefficiency of global advanced transport network. Although, the suggested route has
\nbeen studied by a limited number of researchers, the dissertation attempted to
\nmention possible studies related to the subject matter.
\nChapter three assessed the land bridge systems in United States of America, the
\nEuropean MT system and the Trans Siberian railway system. Each system has its
\nspecial features according to the geography of the countries, the technology used for
\nserving cargo transport and the objectives of introducing the mentioned MT systems.
\nThe intention of discussing those MT systems was to illustrate the reasonability of
\nsuggesting the new route as an efficient integrated transport system.
\nChapter four analyses and assesses the cost comparison between the existing route
\nand new suggested route, the distance comparison, the capacity of Suez Canal and
\nthe factors that may affect the cargo flows. The crude oil transport from the Gulf
\nStates to Europe and the US by pipelines through Syria is assessed with available
\ndetails. The expected factors that would influence the competition level between the
\ntwo routes are discussed such as crossing borders, port efficiency, security concerns,
\nenvironmental concerns, economy of scale and bunker price.
\n5
\nChapter five analyses the significance of the new route for Iraq and its economy by
\nassessing the current situation of the transport system and the forecasted increasing
\ndemand for efficient integrated transport system. An identification of bottlenecks
\nfacing the port sector particularly is carried out in the dissertation in order to provide
\ncomprehensive justification for the needs of improving the transport network to
\nhandle this increase of cargo.
\nChapter six provides a conclusion for the level of competitiveness between the
\nexisting route and new one in terms of cost effectiveness, time saving and the
\npotentiality of a new regional trade area in the Middle East. Some recommendations
\nare given for developing the integrated transport system in order to make the new
\nMT system more realistic and reliable.<\/p>\n

1.5. Limitation of the Research
\nThis dissertation is limited to the economic impact of introducing a new transport
\nsystem to create a competitive route for shipping companies and give more choices
\nto the shipping industry. It does not cover the legal framework for the carriage of
\ngoods by the various modes of transport. The current political situation of the region
\nis considered as a current inconsistence, so the paper will focus on transport factors
\nwithout discussing the political factors. The assessment of land transport cost will be
\nbased upon the current costs in Iraq because there in not sufficient data available
\nabout Syrian transport system costs, which have an impact on the outcome of total
\ntransport cost.<\/p>\n

6
\nChapter 2
\nLiterature Review
\n2.1. Port and Route Selection
\nIn a competitive market, the decision of route and port selection is more demanding
\non shippers and carriers because they are not separate entities any more due to trade
\nglobalization and market variety. The importance of the topic (sample nursing essay examples by the best nursing assignment writing service) has led to several
\nstudies by a number of authors concerning the subject matter, because it is a crucial
\nelement in competition between ports themselves and sea transport with other modes
\nof transport. According to the expert system approach, the port selection is
\ndetermined by a number of factors such as distances, compatibility between ships
\nand ports and vessel characteristics (Jansson & Shneerson, 1987). UNCTAD (1992)
\nhas emphasized \u201con time delivery as a major concern by most shippers and freight
\nforwarders\u201d (as cited in Tongzon, 2009, p.188).
\nIn a study made by UNCTAD (1998) regarding the impact of ports and shipping, it
\nis stated that the port should be located close to an attractive regional market and
\nother smaller ports which have limited capacity in order to be a transshipment and
\nhub port attractive to shipping lines. Wedly, Choo and Schoner (2001) have noted
\nthat the Analytic Hierarchy Process (AHP), which was initiated by Saaty, was
\ndeveloped to be a technique for evaluating the process of decision making and port
\nattractiveness to be chosen by shippers and carriers. Tzong (2001) noted that the
\nreasons for the port of Singapore’s leading position in the world are the strategic
\ngeographical location, high productivity, port connectivity, sufficient
\ninfra\/superstructure, and proper supportive policy by the government. According to
\nMalchow and Kanafani (2001) the Multinomial Logit Model can be used to specify
\nthe factors of port selection. They practiced the model for a specific commodity
\nexported from the USA to eight different ports and found that the most significant
\nfactor was the oceanic distance and the inland distance whereas ship capacity and
\nnumber of voyages were not so significant. Similarly, Tiwary, Itoh and Doi (2003)
\n7
\nselected 14 port-carrier options in their model in order to examine the Chinese
\nshippers’ behaviour. They discovered that the most influential factors were the
\ndistance from origin (imported cargo), distance from destination (exported cargo),
\nport congestion, and the availability of capacity in shipping lines. Chou, Chu and
\nLiang (2003) suggested an Equilibrium model and a fuzzy multiple criteria decisionmaking model (FMCDM) considering port administrators, carriers and domestic
\nshippers as market players in the Taiwanese market to estimate factors dominating
\nthe port selection with a different approach. They realized the characteristics of a
\nport with the revenue gained by the shippers as well as carriers were the most
\ninfluential factors affecting port choice.
\nLirn, Thanopoulou, Beynon and Beresford (2004) observed that the main factors of
\nport and route selection are the cost of carriers, location, physical\/technical
\ninfrastructure and port administration by using the Delphi method for global carriers
\nand major ports in the world. Song and Yeo (2004) specifically deliberated the
\nChinese ports using AHP in order to assess the competitiveness of the ports with
\nregional ports to attract more cargo and traffic. They found the dominating factors
\nwere: strategic location, port facilities, service quality and cargo volume. The system
\ndynamic model was used by Hong and Menachof (2004) to assess the relative
\nattractive factors of the port of Busan in which the port revenue, port investment and
\ncompetitive port investment were taken into consideration in the model as most
\nmajor factors.
\nHwang and Tai (2005) found that the main factors affecting the port choice were
\nhandling efficiency and draft of the harbor as port internal factors, cargo source of
\nhinterland and frequency of routes as port external factors and savings in operating
\ncost for shipping lines. They used three criteria: previously available data, a
\nquestionnaire survey, and the Gray decision model in their assessment of East Asian
\nports. Using a Likert-style questionnaire, Ng (2006) surveyed the top 30 shipping
\nlines in North Europe to monitor the attractive factors of ports in this region and
\n8
\nfound that in addition to the cost effectiveness, geographical location and time
\nefficiency, the quality of the service had to be taken into consideration. Another
\nstudy made by Ugboma, C., Ugboma, O. and Ogwude (2006) monitored the reaction
\nof Nigerian shippers applying AHP to select the port when they import and export
\ntheir cargo. The researchers used a model with six criteria among which the
\nfrequency of vessels call and port efficiency were the most prioritized. They found
\nthat the port of Lagos was preferable among other regional ports. Panayides (2006)
\nnoted that the selection of transport does not exclusively flow from the need of a
\nproduct, but also from numerous needs for cost minimization, enhancing reliability
\nand adding value to transported goods while they are moved from the point of
\nproduction to distribution centers.
\nAccording to Muller (2006), the selection of ports and routes is affected by shippers’
\nexpectations of high quality service, lower cost, and short delivery time of cargo
\neven though they prefer to pay a higher price to get goods delivered in time.
\nAccording to the World Bank (2007), it is reported that the main influential factors of
\nport choice were the inland transport system (road, rail, waterways, and pipeline) and
\nprice quality ratio of port services.<\/p>\n

Chang, Lee and Tongzon (2008) examined the differences of port selection
\nbehaviour of 158 international container carriers world wide with specific routes
\nusing exploratory factor analysis and confirmatory factor analysis with various
\ncriteria factors. The survey revealed that the port should follow different strategies
\nbecause it was concerned about how container lines adapted to port selection factors
\nrather than the effectiveness of the port. Nevertheless, this research is inapplicable
\nfor some shipping types like dry bulk and wet bulk.
\nWiegmans, Hoest and Notteboom (2008) interviewed 12 major container carriers in
\nthe Hamburg-Le Havre range and they also exhibited in their model the hinterland
\nconnection, reasonable port traffic and immediate availability of consumers.
\n9
\nFurthermore, the total portfolio of the ports and environmental issues has been
\nconsidered as additional criteria. Thus they found that the speed, handling cost,
\nreliability and hinterland connection have an impact on the port selection. By using
\nthe system theory, Magala and Sammons (2008) looked at the whole supply chain
\ninstead of taking the port as a part of an individual element to realize that the total
\nlogistic cost, the quality of services and the reliability of the supply chain were the
\nmajor factors of port choice.
\nMangan, Lalwani, and Fynes (2008) have considered that the ownership model of
\nports and the relationship between the public and private sectors have a significant
\nimpact on ownership reform. On the other hand, deregulating the ports’ ownership
\nallowed the Global Port Operators (GPOs) involvement that provide efficient and
\ncost effective services in many ports in the world in order to be chosen by major
\ncarriers. The contracts of carriage of goods and INCOTERMS used in the contract
\nhave an influential impact on which mode of transport should be used as well as the
\nport of destination. For instance, if it was agreed to use the CIF term, the seller be
\nassumed to carry the cargo by sea and the port of destination should be specified if
\nusing other terms (Donner, 2009).
\nAccording to Moon (2009) the ideal port to be called by vessels should have
\nadequate depth of water within the harbor and its approaches, minimum tide and
\ncurrent volatility, free of fog and ice, appropriate anchorage area inside\/outside the
\nharbor and efficient inland connections with value added service facilities. The
\ncurrent tendency of international transport to decide about routes and port selection
\nmostly depend on a number of factors such as the shipping service pattern (Liner,
\nTramp and Industrial), the logistics concept and the best quality services with cost
\neffectiveness (Ma,2010).
\nRegardless of the model used and the researcher, two links could be dominating the
\nselection of ports by carriers as well as shippers. The sea link, which is related to port
\n10
\nlocation, accessibility, and distances between ports, whereas the land link is decided
\nby port efficiency, facilities for value added activities and connectivity with the
\nhinterland, which require effective multimodal transport systems to cope with the
\ncargo transported by sea.
\n2.2. Multimodal Transport (MT)
\nDue to different destination and time factors, cargo and passengers can be
\ntransported by more than one mode of transport (sea, rail, road, air, and pipelines) or
\nby combining different modes together. The following definition is given by
\nUNCTAD (2000, p.5)
\nInternational multimodal transport means the carriage of goods by at least two
\ndifferent modes of transport on the basis of a multimodal transport contract
\nfrom a place in one country at which the goods are taken in charge by the
\noperator to a place designated for delivery situated in a different country.
\nThe consequence of recent trends in global trade, such as multimodalism,
\ncontainerization, e-commerce, information technology, safety, security and
\nenvironmental issues, forced the international community to have a positive reaction
\nto reform many systems and legislation like the Rotterdam Rules to cover the legal
\nside of such development. Since the MT concept has a very wide range and many
\nresearchers discussed it in detail, this paper is limited to mentioning some of them.
\nAn analysis of the MT system between Maghrab and Western European countries by
\nMartino and Morvillo (2005) using an empirical analysis found that the structure of
\nthe transport chain, which includes the infrastructure of the system and the
\ninterchange points, such as seaports, would influence the transport system. The
\nstrategies of operators to be efficient and the level of interoperability of the transport
\nchain have an influential impact on the MT reliability.
\n11
\nAccording to Whitehurst (2005), the efficient MT managed by a multimodal
\ntransport company with a centralized decision making can cope with the shippers’
\nrequirements, geographical markets, production cost, transport technology and
\ncompetitor strategies. Therefore, the control of modes properly managed in terms of
\ncost effectiveness, will result in benefiting from economies of scale and
\nenvironmental friendliness decently monitored.
\nIn Indonesia, which is an archipelago with 17,000 islands, the MT has a crucial
\nimpact on the country’s transport system in terms of local transport among islands
\nand international transport with other countries. Obviously, the sea transport
\nrepresents a larger part in the system for moving passengers and goods. In such a
\ncountry the efficiency of nodes, such as ports, is considered as the main influential
\nfactor of transport cost and MT system efficiency, as noted by Lubis, Isnaeni,
\nSjafruddin and Dharmowijoyo (2005).
\nWoodburn, Allen, Browne and Leonardi (2008) discussed the international MT
\nsystem crossing the borders between countries by road and rails. The customs
\nclearance, political decisions, security and the globalization of trade have a decisive
\nability to enhance the MT. For example, the most efficient international MT system
\ncan be seen in Europe due to the elimination of most constraints between the EU
\ncountries, which encourages global producers to have their assembling and
\nproduction centers distributed. Litman (2009) suggested the main factors affecting
\nthe MT were the traveling time, the operating cost of the used mode, the
\nenvironmental impact of the transport mode, speed, and congestion delays. The
\nresearch focused on ground transport taking into consideration the highway and rail
\nand was comprehensive for such specific modes.
\nMT plays a role as a major part of the recent competitive economy, particularly in
\nthe shipping industry. Today, many carriers prefer to have full control of logistics
\nand deliver the goods to the shelf of the retail rather than keep them in the port
\n12
\npremises. Therefore, efficient MT is one of the decisive factors in the total supply
\nchain. In fact, it seems reasonable to evaluate how it is significant to this dissertation.
\nThe cooperation between inland transport companies, shipping companies, railway
\ncompanies, and appropriate highways illustrate the efficient movement of goods.
\n2.3 Alternatives to the Suez Canal
\nA modern transport model was studied by the Italian Consortium for Iraqi Transport
\nInfrastructure to generate the distribution of the traffic flows in the multimodal
\nnetwork in Iraq and abroad. As a matter of fact, the implications of the Iraqi network
\non international traffic are worth mentioning. Consequently, the network description
\nalso has to cover a large part of the transport network away from the Iraqi border.
\nAfter the beginning of the stabilization of Iraq, it was expected that new corridors
\nwill be opened (i.e. through Syria) or that old corridors will be restored (i.e. via Iraqi
\nsouthern harbors). This will, probably, be moving the attention away from the
\ncorridor used during the embargo (C.I.I.T.I, 2008).
\nAlthough, this study has shown the demand trend increasing in terms of general
\ncargo and passenger traffic, the first factor is mainly related to the capacity of the
\nIraqi transport system to operate in a competitive fashion in an international market
\nof transport services. An additional factor is the capacity of the Iraqi transport system
\nto not only support but to act proactively for the economic development of the
\ncountry. In other words, since the achievements of the Iraqi economy are intimately
\nlinked to the efficiency of the transport system, the suitability of the transport system
\nis also measured in terms of how much it can positively or negatively impact (i.e.
\nbottlenecks) on the economic development. Moreover, the study discussed the
\nadvantages of new routes for ports and Iraq’s benefits in addition to the benefits for
\nthe shipping lines as the most important users of the new routes. Therefore, this
\ndissertation will analyze the cost of new multimodal transport routes in order to
\ndemonstrate the advantages for ship owners and cargo owners as well.
\n13
\nA dissertation was written by Mohsenpour (2004) on a similar topic (sample nursing essay examples by the best nursing assignment writing service) comparing the
\ncost of carriage of goods between the north-south corridor through Iran and the Suez
\nCanal route. The writer concluded that “Using a new route as a new possibility in
\ntransport can reduce costs, save time and provide better flexibility”. Especially for
\nvaluable cargo, which is more dependent on time rather than cost, the fast
\nmultimodal transport can be the alternative if a new production market is introduced,
\nbecause the market is moving from one region to another.
\nMa (2009) said a “land bridge can be a terrible threat to maritime transport,
\nespecially the ones across the Euro-Asia continent”. It could also be the idea of
\nintroducing a new market in Iraq, especially for agricultural products, to serve the
\nArab Gulf countries if the new logistic system is introduced.
\nThis dissertation will discuss the possibilities of having new markets of a free trade
\narea in the Arabian Gulf countries and also, if Turkey joins the EU, their impacts on
\nnew multimodal transport routes. Obviously, the domestic data is not sufficient to
\nprove the competitiveness of new routes without making an international transport
\nanalysis, because the shipping industry tends to be globalized rather than localized.
\nIn particular, the effect of climate change can have an impact on shipping routes
\nbetween the Far East, Europe and the United States of America.
\n14
\nChapter 3
\n3. Selected Existing Multimodal Transport Systems
\n3.1 The land Bridge in the US
\nThe location of the United States of America between the two biggest markets in
\nEurope, crossing the Atlantic Ocean, and Asia, crossing the Pacific Ocean, resulted
\nin developing land bridge routes for freight movement. According to Muller (1999),
\nit started in the mid 1960s to connect different modes of transport such as railroads
\nwith waterways and roads when cargo was being containerized. The cargo that was
\nshipped by ocean vessels from Europe to the western parts of the US has to pass
\nthrough the Panama Canal, which takes more time and involves higher cost. The
\nsame applies to the cargo moved from Asia to the eastern parts of the US as shown in
\nFigure 3.1 .Therefore, the efficient West\/East land bridge links the ports of New
\nYork, New Jersey and Hampton Roads on the East coast with the ports of Los
\nAngeles, Long Beach, Portland and Seattle on the West coast of the US as gateway
\nports to hinterland markets.
\nFigure 3.1 The North American Landbridge.
\nSource: http:\/\/people.hofstra.edu\/geotrans\/eng.
\n15
\nThe major part of container transport is carried by the railroads by using the double
\nstack trains and trucking which is not only for cargo moved in and out of the United
\nStates but also for domestic transport. According to the US Department of Transport
\n(2006), the trucking services represented 34% of the total domestic freight
\ntransported in terms of ton-miles for distances less than 500 miles, followed by rail
\ntransport 31%, pipelines 16% and short sea shipping 11%. On the other hand, for
\ndistances more than 500 miles, rail transport was the dominant mode as shown in
\nFigure 3.2.
\nNonetheless, the inland waterways traffic is increasing in some parts of the US on the
\nMississippi River between Texas and Louisiana. Similarly, the regular lines between
\nthe port of Portland and Idaho have increased the cargo movement linking the East
\nwith the West by waterways transport (Port of Portland, 2009).
\nFigure 3.2 Comparison of major Modes in the US
\nSource: U.S. Bureau of Transport Statistics (2006).
\nThe transport system in the US has mostly relied on road transports for carriage of
\ngoods between states. Nonetheless, environmental concerns due to road congestion,
\nsince trucking is the major pollutant in land transport, and the cost comparison with
\n16
\nother modes pressed the US government to reassess the transport system. The Texas
\nTransport Institute TTI (2002) studied the economic impact of road congestion and
\nfound that the total congestion cost was $67.4 billion, illustrated as 3.6 billion hours
\nof extra traveling and 5.7 billion gallons of fuel consumed in congestion (as cited in
\nBrown and Hatch, 2002). As a result, railroad transport became an alternative to
\ntrucking by carrying the loaded trailers (trailer piggyback) to move them by train
\nbetween states to reach their final destination. Moreover, the US Department of
\nTransport has seriously emphasized short sea shipping along the coast lines to
\ndevelop the transport system by eliminating the impact of congestion on the
\neconomy and to reduce exhaust gas emissions generated by road transport.
\nNevertheless, the combined transport system in the US is functioning as an efficient
\ntransport system, especially in door-to-door services. In the United States
\nspecifically, goods can be transported by ocean going vessels for the international
\ntrade whereas the domestic carriage of goods by rail is considered to be efficient. The
\nrailroad transport is preferable for long-haul transport between the West and East,
\nwhereas trucking is the most significant mode of transport for pick-up and delivery
\nof cargo and ocean carriers for international transport (Muller, 2010).
\nAlthough there is trade imbalance between the West and East of the US, the MT
\nsystem in the US is considered to be efficient due to a number of factors:
\n\u2022 The transport and communication networks in all modes are developed and
\ninternal, regional and international connections enhanced.
\n\u2022 The U.S. Government has adopted the latest technology and created a favorable
\nbusiness environment through adopting proper policy and regulatory frameworks.
\n\u2022 The developed programs for outsourcing of some activities, particularly in the
\nfield of communications and land, sea and air transport. The privatization policy,
\nwhile controlling the competition among the service suppliers, resulted in a high
\nservice level of the transport sector.
\n\u2022 The MT function within one country, which means that borders crossings and
\ncustoms cannot be seen as obstacles and bottlenecks to the transport system.
\n17
\nMoreover, it enjoys the advantages of standardization of rules, documentation
\nand uniform railroad gauge.
\n\u2022 The continental strategic location of the U.S. between the two biggest markets in
\nAsia and Europe.
\n\u2022 On top of all the mentioned factors, the information exchange with the clients by
\nthe EDI system is efficient and reliable.
\nAlthough the MT system is recently performing a considerable role in the transport
\nsector, the expansion project ( help with nursing paper writing from experts with MSN & DNP degrees) of the Panama Canal can be foreseen as a challenge.
\nThe extended Canal, project ( help with nursing paper writing from experts with MSN & DNP degrees)ed to be operational in 2014, will have locks 427 m long,
\n55 m wide and 18.3 m deep (Panama Canal Authority, 2006). In other words, cape
\nsize bulk carriers and the super-post panamax container vessels will easily be able to
\npass through the Canal. Therefore, the trade between the East and West of the US
\nwith Europe and Asia might increase using shipping rather than land transport due to
\nthe economies of scale and environmental concerns.
\n3.2 Trans European Transport Network (TEN-T)
\nRecently, the enlargement of Europe and removing the barriers between European
\ncountries demanded an integrated transport system in order to establish significant
\nconnections between the different parts of Europe. The Commission of the European
\nCommunities (2001) issued a White Paper, which emphasized the need for
\noptimizing the transport system in order to meet the requirements of the development
\nand enlargement of the EU.
\nThe commission found the improvement of the transport sector significant, because
\nof its economic impact representing 10% of GDP of the EU countries. The total
\nexpenditure would run to 1000 billion euros and would create ten million jobs.
\nTherefore, the paper recognized this and project ( help with nursing paper writing from experts with MSN & DNP degrees)ed two revision stages for the 1996
\nguidelines of developing the TEN-T. First in 2001, the focus was on the removal of
\nbottlenecks in the whole transport network, instead of emphasizing development
\n18
\nwithin transport corridors. In addition, priority was given to MT corridors by
\nincreasing the capacity and improving the traffic control within the EU countries.
\nAs a second stage, in 2004 a new revision was made to focus the concern of the
\ncommunity on the concept of “motorways of the sea” to enhance the links between
\nEU ports with rail, road, and waterway connections. As a result, intra-Europe
\nshipping and railroad system improvements intended to alleviate bottlenecks that
\nwere caused by congestion of roads within the EU. The White Paper presented the
\nneeds of attracting the private sector in order to achieve an adapted infrastructure and
\nadequate facilities benefiting from their expertise as well as private capital
\ninvestments.
\nAccording to the European Commission (2005, p.7) it is project ( help with nursing paper writing from experts with MSN & DNP degrees)ed by the EU that
\nBy 2020, TEN-T will include 89500 km of roads and 94000 km of
\nrailways, including around 20000 km of high-speed rail lines suitable for
\nspeeds of at least 200 km\/h. The inland waterway system will amount to
\n11250 km, including 210 inland ports, whilst there are a further 294
\nseaports and some 366 airports.
\nObviously, this project ( help with nursing paper writing from experts with MSN & DNP degrees) requires big investment and budget provisions to be
\nallocated by the EU countries to support the proposed network. The European
\nCommission prioritized 30 axes to be completed and included in the project ( help with nursing paper writing from experts with MSN & DNP degrees)
\nfunding with an estimated cost of EUR225 billion, whereas the total TNT-T
\ninvestment will exceed EUR 600 billion (INE, 2010).
\nFigure 3.3 shows the connections between different EU countries and various
\nmodes of transport. The MT system in the EU reduces the transport cost for all
\nEU countries through the advantages of geographical location of several countries
\nand development. Therefore, the combined transport system in the Netherlands
\nserves most of the cargo imported by sea for Germany through the port of
\n19
\nRotterdam by rail, roads, waterways and pipelines. Similarly, most of the cargo
\nunloaded in the port of Antwerp goes to France by rail, road and inland
\nwaterways whereas the port of Marseille has been connecting the southern part of
\nFrance and neighboring countries. Moreover, the port of Hamburg is the hub port
\nfor transshipped cargo to the Baltic Sea countries.
\nThe objectives of the EU transport policy were not only for more efficiency and
\nlower cost but also for a sustainable and environmentally friendly network. Thanks
\nto the MT system, the air pollution and road accidents would be reduced through
\napplying strict European legislation and standards, which lead to significant
\nimprovement in air quality of European cities.
\nFigure 3.3 Trans-European Transport Network (TEN-T)
\nSource: http:\/\/ec.europa.eu\/transport\/publication\/doc
\nWith regard to safety, the EU has adopted a comprehensive set of legislations
\ncovering all the key factors affecting safety and specialized safety agencies have
\n20
\nbeen set up for rail transport (ERA), aviation (EASA) and Shipping (EMSA). On
\nthe other hand, the regulations for driving and hours of rest for truck drivers,
\nencourage shippers to shift the mode from road transport to RORO vessels or
\ntrains with their trucks. The integration of MT is often happening between the
\nScandinavian countries, Germany and the Baltic Sea countries which link
\nNorthern Europe with the South via Germany. Furthermore, rail wagons are
\nloaded in RORO vessels between the Port of Trelleborg in Sweden to Germany
\nand Poland to allow trains to move between EU countries for transport of
\npassengers as well as goods.
\nThe inland waterways transport by barges is also playing a very considerable role
\nfor the transport sector. Presently, this sector has grown to compete with other
\nmeans of transport such as railways and roads. It was reported by the port of
\nAntwerp that the proportion of its hinterland container traffic transported by rail
\nin 2009 had fallen from 11% to 10%, whereas the share of the waterway barges
\nhad grown from 32.4% to 34.8%. Likewise, the railroad shares fell from 13% to
\n11% for transported containers from the port of Rotterdam, whilst the barge
\nshares increased from 30% to 33% (Containerization International, 12, July
\n2010). These facts were also presented by the port of Rotterdam and the port of
\nAntwerp during a field study of the Port Management student of World Maritime
\nUniversity (WMU) in February 2010.
\nThere are about 40 container terminals along the banks of the Rhine River
\nbetween Rotterdam\/Antwerp and Basel in Switzerland, which is located about
\n870 km from the sea. This route facilitates the cargo movement by barges from
\nthe Atlantic coast to the markets in Germany, France, and Switzerland with more
\nthan one million containers being transported from Rotterdam and Antwerp.
\nSimilarly, the Rhone River serves the inland waterways transport in France from
\nthe Mediterranean Sea through Marseille, whereas the Seine River plays the same
\nrole from the port of Le Havre. Some other rivers like Elbe and Weser are used
\n21
\nfor similar purposes between Hamburg and Bremen in Germany and the Danube
\nfrom the Black Sea (UNESCAP, 2004). The attraction of the new English
\nChannel Tunnel for more traffic to transport goods and passengers between the
\nUK and the southern part of Europe can be seen as a land transport alternative for
\ncoastal shipping (Ma, 2009).
\nThe reliability of the MT system in the EU influenced the total supply chain and
\nthe integration of the EU with neighboring regions in addition to the world
\neconomy. Especially, the development of transport and communication
\ntechnology had notable impacts on the revolutionary increase in the globalization
\ntrend. Therefore, many international companies benefited from such
\ndevelopments in the transport sector by diversifying their activities among
\ndifferent production and assembling centers. In other words, manufacturing of
\nsome parts of a specific product can be produced in various countries due to the
\nexpertise and cost advantages and all parts can be assembled in another country.
\nBasically, these changes of the market structure are challenges associated with
\nthe needs of efficient transport, particularly after the implementation of JIT
\nsystems by global producers. Transport has become a crucial logistics element to
\ncontrol the inventory cost by offering a high service level to achieve significant
\ncostumer satisfaction. In addition, the differences in the national economies of
\ncountries have affected the market balance and the funding shares of transport
\nrelated project ( help with nursing paper writing from experts with MSN & DNP degrees) investments by different countries. Other challenges for the
\ntransport sector have been noted by the European Commission (2008) as follows:
\nFirst, it is forecasted that the average age of the European population will be 65 or
\nmore by 2060. In the past, people of such age traveled less than younger people
\nbut recently they tend to travel more, which means an increase in the demand for
\ntransport system improvement and capacity. Second, the migration to Europe
\nmight increase the population by 56 million in the next 50 years creating pressure
\non transport requirements. Likewise, the internal mobility of labor forces within
\n22
\nand between EU countries will increase due to the elimination of barriers. Third,
\nthe impact of the transport sector on green house gas (GHG) emissions as the
\nmost polluting sector urged it to mitigate its effect on the environment and to take
\npractical steps to achieve this aim. Finally, urbanization, which tends to be
\nEuropean inhabitants’ preferred life style, increases dramatically, which will
\ndemand more transport and cause congestion as well as GHG emissions.
\nNevertheless, the MT system in EU is functioning as a successful player in the
\neconomy and market flows of the EU countries due to several factors:
\n\u2022 The liberalization of trade adopted within the EU region has created a high
\nlevel of competition between the players within one mode of transport and
\nbetween different modes. Such competition, under the control of the EU
\ncommunity, has improved the quality of transport services.
\n\u2022 The concern of all members of the EU to develop transport policy and the
\nlegal framework to unify the different associated institutional, organizational
\nand social changes.
\n\u2022 The enlargement of the EU resulted in barriers coming down between the EU
\ncountries which means the crossing of borders for passengers and goods
\nbecame simpler. Moreover, the Customs agreements in the EU region have
\nstrongly influenced the cargo flows across borders of the EU countries.
\n\u2022 The contribution of technological evolvement and innovation has been
\nenhancing the transport sector safety and security to be reliable.
\n\u2022 The comprehensive planning system for long and short terms with regular
\nassessment of the plans.
\n\u2022 The adequate connections between different modes such as ports efficiency
\nand train stations.
\n\u2022 The permanent funding for transport network project ( help with nursing paper writing from experts with MSN & DNP degrees)s by different means of
\nfinancial support.
\n\u2022 The active partnership between the public and private sectors which involved
\nprivate capital and interest in the transport sector.
\n23
\n3.3 Trans Siberian Railway (TSR)
\nThe trade between Europe and Asia in recent years has been growing steadily,
\nindicating a need for transport improvement and expansion. The TSR is the
\nlongest transcontinental railway that originated in Moscow to link Europe and
\nRussia with the Far East via the Port of Vostochny in Vladivostok. Historically,
\nthe TSR was used efficiently in the First World War to transport troops and arms
\nfrom the US via Vladivostok to Russia when the German submarines precluded
\nprovision of arms through the Baltic Sea (Liliopoulou, Roe & Pasukeviciute,
\n2005).
\nThe double-track railroad line is designed to transport about 130 million tons of
\ncargo annually including about 600000 containers. The distance to be covered by
\nthe TSR is around 9,780 km, and it takes 15 days between Beijing and Hamburg,
\nwhereas it takes around 35 days via the Suez Canal (Lukov, 2008). The different
\ndistance between the sea transport via SC compared to the TSR shows a
\nconsiderable saving in favour of the TSR, which has lead to increased traffic from
\nRussia to China as shown in Figure 3.4. Therefore, there are efforts and overall
\npositive indications that have been taken by the Russian Government and the
\nprivate operators of the TSR to achieve enduring efficient and competitive
\nrailway services.<\/p>\n

According to Tsuji (2010), the TSR development phases in the last 40 years
\nresulted from a number of reasons as follows:
\n\u2022 Between 1970 and the 1980s the utilization of the route was mostly for transit
\nmovement from Japan to Europe and the Middle East. Because of the new set
\nof freight rates for transit cargo, 30% lower than sea transport, implemented
\nby the Soviet Union, the number of containers reached 110,000 TEU in 1983.
\n\u2022 In the 1990s, the route suffered a loss of its competitiveness with deep sea
\nshipping due to the unclear picture after the collapse of the Soviet Union.
\n24
\n\u2022 In 2000, the third phase started when the crude oil prices increased to
\ninfluence the demand for food consumption and electronics in Russia.
\nTherefore, the Russian trade with Korea and China increased the use of TSR.
\n\u2022 In 2006, the Korean car manufactures started new production bases in Russia
\nbecause of the elimination of the rebates for transit cargo which lead to higher
\nprices for cargo transported to Russia. The production bases in Russia,
\nimports of production parts from Korea by the TSR increased to reach about
\n710,000 TEU in 2008. Mostly containers were transported as imports
\n(358,416 TEU) and exports (322,221 TEU) to and from Russia, whereas only
\n29,035 TEU was transit cargo (Containerization International, as cited in
\nMuller 2010).
\n\u2022 In 2009, the economic crisis affected the TSR transport because of the drop of
\nfreight rates in the shipping sector which shows more flexibility than TSR.
\nFurthermore, the Russian economy was also influenced badly by the global
\nfinancial crisis, which caused a sharp decrease in transport demand.
\nFigure 3.4 Trans Siberian Railway TSR
\nSource: Russian Railways (2010) http:\/\/eng.rzd.ru\/isvp\/public
\n25
\nPulling all phases together, the demand of transport using the TSR has been
\nfluctuating, especially for transit cargo because of the price inelasticity of supply
\n(railway services). In other words, when the demand for TSR services decreases,
\nthe price of the services should also follow the same curve according to the law of
\ndemand and supply (Ma, 2009). The changeable freight rates of sea transport have
\na considerable impact on the competition between the two modes during the
\ndownturn periods as shown in Figure 3.5. In addition, the numerous service
\nproviders in deep sea shipping create a high level of competition to satisfy the
\ncostumers. On the other hand, there are not many service providers for railway
\ntransport, which creates practically a monopoly.
\nEven though the TSR services are relatively faster (11 days difference from Kobe,
\nJapan to Hamina in Finland) than sea transport, the advantage of economies of
\nscale originating from the vessels’ size compared to the railways’ capacity made
\nshipping more desirable than TSR, especially when the time factor is relatively
\nunimportant compared to transport cost for low value cargo such as coal.
\nIn addition, the trade imbalances between eastbound and westbound cargoes due
\nto lack of cargo to be transported eastbound, resulted in large numbers of empty
\ncontainers having to be transported, which increases the transport cost for
\nshippers.<\/p>\n

The TSR system can be developed more and would reach the highest level of
\ncompetition with existing sea routes by reducing the burden of documentation and
\neliminating the border crossing obstacles to minimize the transit time of goods
\nwhile transported. On the other hand, the standardization of the railway gauge
\nwith European railways would minimize the waste of time due to different
\ngauging. Theoretically, the railroad gauge can be standardized, but it is difficult to
\nimplement due to high investments needed for construction of new railroads
\neither in Europe or Russia, which is not going to happen.
\n26
\nFigure 3.5. Price Fluctuation: TSR vs. Deep Sea transport
\nSource: Tsuji (January, 2010)
\nThe switching of trains at Russian borders for the rail connection between
\nDuisburg in Germany and Moscow is evidence of time consuming work due to
\ngauge variation (International Containerization, 2010). Moreover, the cooperation
\nbetween the countries benefiting from the TSR in terms of economic and legal
\naspects would lead to a participative transport policy to fulfill the requirement of
\nan efficient mode of transport. Ports also need to operate efficiently and to be cost
\neffective as part of the total supply chain on the TSR routes. There are many other
\nMT systems that can be mentioned, such as the land bridge from the Far East to
\nEurope via Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan,
\nTurkmenistan and Uzbekistan). The land linkages of these countries with China
\nand Mongolia in the east, the Russia Federation in the north and with Iran and
\nPakistan in the south can play a significant role for transport between Asia and
\nEurope (UNCTAD, 2000). The combination of land transport from China with
\nsea transport through the Caspian Sea is considered as MT competing to some
\nextent with the existing sea route as far as distances are concerned. Nevertheless,
\nthe burdens of crossing borders and high transport cost due to lack of economies
\nof scale and port charges are still encouraging the shippers to move their cargo by
\nsea.
\n27
\nChapter 4
\n4. Distance and Cost Comparison between the Suez Canal and New Routes
\n4.1 Distance
\nTransport cost is mainly determined by the fixed and operating cost for the mode that
\nis used for a specific route, such as the infrastructure and superstructure cost. On the
\nother hand, the distance of movement for goods and passengers has an impact on
\nboth fixed cost for railway and road infrastructure and operating cost for all transport
\nmodes. This dissertation attempts to analyze two multimodal options as alternatives
\nto existing routes. First, unloading the cargo that is shipped from the Far East and
\nSouth Asia to Europe in a hub port proposed to be located in the North of the
\nArabian Gulf (South of Basrah in Iraq) as shown in Figure (4.1).
\nFigure 4.1 First option of proposed routes.
\nSource: www.Maps.Google.com and author.
\n28
\nThe unloaded cargo is to be loaded on trains and trucks and transported to the Port of
\nTartous in Syria to be loaded and shipped to Europe via the Mediterranean and vice
\nversa for cargo from Europe to Asia.
\nTable 4.1 The distance comparison between existing route and new routes (via Iraq
\nand Syria)
\nRoutes via
\nSuez canal Distance
\nNM.
\nTime1 Routes via Iraq
\nand Syria
\nDistance
\nNM2
\nTime3
\n%
\nShanghaiRotterdam
\n10409
\n30 days
\n23
\nhours
\nShanghaiRotterdam
\n10048 29 days
\n22 hours
\n96.5%
\nSingaporeMarseille
\n6506 19 days
\n9 hours
\nSingaporeMarseille
\n6221 18 days
\n12 hours
\n95.6%
\nDubaiRotterdam
\n6129 18 days
\n6 hours
\nDubai-Rotterdam 4543 13 days
\n13 hours
\n74%
\nMumbaiRotterdam
\n6296
\n18 days
\n18
\nhours
\nMumbaiRotterdam
\n5590 16 days
\n16 hours
\n88.8%
\nAustraliaMarseille
\n9800 29 days
\n4 hours
\nAustraliaMarseille
\n9896 30 days
\n11 hours
\n101%
\nSource: www.searates.com
\nThe distances and traveling time are shown in Table 4.1. The new routes have an
\nadvantage for being shorter in terms of distance and time than the existing route
\nbetween Asia and Europe if the distances considered were the only determination
\nfactors and the other factors were not taken into consideration. A voyage starting in
\nShanghai transiting the Suez Canal to Rotterdam is 10,409 miles and takes about 31
\ndays while using the new routes, so the distance would be 10,048 miles and takes<\/p>\n

1
\nVessel speed assumed 14 knots
\n2
\nThe distances were taken in nautical miles both for sea and land distances to standardize
\nthe measurement.
\n3
\nThe traveling time between Um Qasr-Tartous is assumed to be 48 hours by train or truck
\nwithout taking cargo handling time into consideration.
\n29
\nabout 30 days which is 361 miles shorter with one day difference. The differences in
\ndistance and time for a voyage between Singapore and Marseille are similar. The
\ndistance from Dubai through the SC to Rotterdam is 6,129 miles and takes about
\n18.25 days but for the new routes it would be 4,543 miles and takes about 13.5 days
\nin which the difference in distance is 1,586 miles and in time 5 days. Furthermore,
\nthe distance from Mumbai to Rotterdam is 6,296 miles and takes 19 days through the
\nSC when the suggested route is 5,590 miles and takes about 17 days.
\nObviously, the shorter distances for transport are preferable to carriers and shippers
\ndue to the relationship with cost and time. Therefore, the transport between Asia and
\nEurope would be cheaper if the distance was the only factor of concern. In practice,
\nthere are other factors, which have decisive impacts on the measurement of transport
\nsystem effectiveness and carriers decision of route selection.<\/p>\n

Figure 4.2 Second Option of proposed routes
\nSource: www.maps.Google.com and author
\nA second option, instead of transporting the cargo via the Port of Tartous, is that
\ncargo would be moved via Turkey to Eastern Europe by crossing the Black Sea and
\nconnecting this route with the Viking intermodal train which links Ukraine, Belarus,
\n30
\nand Lithuania. Moreover, the routes can be connected with central and western
\nEurope via Istanbul as shown in Figure 4.2.
\nTable 4.2 The distance comparison between existing route and new routes (via Iraq
\nand Turkey)
\nRoute via Suez Canal
\nDistance1
\nmiles
\nRoute via Iraq and
\nTurkey
\nDistance
\nmiles
\n%
\n1 Shanghai-Hamburg 12264 Shanghai-Hamburg 9435 77%
\n2 Shanghai-Klaipeda 12726 Shanghai-Klaipeda 9085 71.4%
\n3 Shanghai-GenovaMunich
\n10563 Shanghai-Munich 9181 87%
\n4 Shanghai-Rotterdam 11978 Shanghai-Rotterdam 9573 80%
\nSource: www.searates.com
\nThe land bridge between the proposed hub port in the North of the Arabian Gulf and
\nthe port of Samsun on the coastline of the Black Sea has an advantage of being
\nshorter than existing routes as shown in Table 4.2.
\nAlthough the distance measurement is inaccurate due to the terrain differences for
\nthe land, the distance from Shanghai to Hamburg via the SC is 12,264 miles and
\nthrough the new connections it is 9,435 miles, which is much shorter than the
\nexisting route. Likewise, the distances from Asia to West Europe and the Baltic Sea
\ncountries are shorter by using the proposed routes.
\nIn fact, the Viking intermodal connection as shown in Figure 4.3 might support the
\nidea of the new model since it has been constructed and has been working properly
\nas an efficient mode of transport linking the Baltic Sea with the Black Sea. On the
\nother hand, crossing the borders and the number of ports influences the time of
\ntransport especially with three different regions and countries if the cargo were
\ncarried by the new land bridge. The joint railway with a distance of 1,734 km from<\/p>\n

1
\nThe distances were converted into miles and taken as straight lines between cities.
\n31
\nOdessa and Ilyichevsk ports in the Ukraine crossing Belarus to the port of Klaipeda
\nin Lithuania is functioning as a successful and attractive intermodal transport system
\nas shown in Figure 4.4. The journey of the Viking train takes 48 hours between the
\nmentioned ports and there are train departures twice a day (Kaminskas, 2008).
\nFigure 4.3 The Viking Intermodal Train Project
\nSource: www.hollandintermodal.com
\nFurthermore, the route between the Port of Odessa in Ukraine and the port of Samsun
\nin Turkey by RORO services, which is 394 nm and takes about 1 day by a ship, can
\nplay an important role in connecting the Middle East with Eastern Europe and
\nRussia. Similarly, it could be connected between the proposed new port in Iraq and
\nport of Samsun by a land bridge with highways and railway with a distance of 897
\nmiles which may take two days. Therefore, the transport time of cargo from
\nShanghai to Klaipeda via the new routes will take approximately 23 days while using
\nthe SC route takes about 32 days.
\nNevertheless, even though the distances of the two proposed options as alternatives
\nfor the SC, are shorter in terms of transport time, the assessment of the comparison
\nby using the distance factor is insufficient to convince the carriers of the cost
\neffectiveness of the new routes.
\n32
\nFigure 4.4 Increasing growth of transport by Viking train
\nSource: Source: www.hollandintermodal.com
\n.
\n4.2 Transport Cost and Freight Rate
\n4.2.1 Sea Transport Cost
\nIn order to determine the total cost of a shipping company, it is necessary to have an
\nestimate and analysis of the cost components which affect the freight rates and ship
\nowners’ earnings. The freight rates have been volatile depending upon the market
\nfluctuations which have an impact on the shipping income and expenditure.
\nMoreover, the competitive market has a decisive influence on shipping companies to
\nbehave as price takers or makers. Recently, the freight rates have been mostly
\ndecided by the market which forced shipping companies to adjust their cost
\naccordingly.
\nAccording to Stopford (2009) the shipping total cost can be divided into five
\ncategories:
\n1. The operating cost which includes ship’s expenses for daily operations such as
\ncrew wages, stores, and daily maintenance. It also includes the insurance cost and
\nmanagement expenses.
\n33
\n2. Periodic maintenance costs based on the requirements of periodic inspection by
\nmaritime authorities and classification societies to ensure the condition of the
\nship hull as well as the machinery. The periodic maintenance is mostly done by
\ndry-docking.
\n3. Voyage costs are related to specific voyage expenses which are considered
\nvariable such as fuel consumed, port charges and canal dues.
\n4. Capital costs represent a significant portion of a shipping company’s cost and are
\naffected by the way of funding (loan with interest or using company’s liquidity)
\nto purchase ships and the ship status, new or second hand.
\n5. Cargo handling costs are related to loading, stowing and unloading the cargos
\nwhich are particularly important in liner services.<\/p>\n

Figure 4.5 General Cost Classifications for Bulk Carriers
\nSource: Stopford, M. (2009, p.225).Maritime Economics (3rd Ed).Routledge.
\nFigure 4.5 shows the general cost classification for bulk carriers as an illustration of
\nthe significant impact on voyage cost that changing the vessels’ routes may have.
\n34
\nAlthough the cargo handling cost can be affected by changing the routes and port of
\ncall, the component of the mentioned total cost most affected is the voyage cost. The
\ncrew wages, daily maintenance, capital cost and periodic maintenance of vessels are
\nrelatively not strongly affected by a ship’s route. Marine insurance costs increases
\nsignificantly on some routes that have a threat accumulation such as piracy, wars,
\nand strikes causing high transport costs. For instance, the companies raised the
\ninsurance premium for vessels proceeding to the Arabian Gulf due to the Gulf war in
\n2003 and such increase still have an impact on the transport cost.
\nShipping companies tend to control the total cost of operating their vessels through
\nreducing the manning costs using a minimum number of crew onboard ships.
\nFurthermore, the number of ports of call for bigger vessels in liner shipping is
\nreduced due to the time consumed in ports and high cost of port charges.
\nNevertheless, the fuel consumption is the highest cost for operating a shipping
\ncompany representing 30.4%1
\nof the total cost for bulk carriers as shown in Figure
\n4.5. On the other hand, the port charges and canal dues are a considerable part
\nrepresenting 10% of the total cost. The fuel consumption can be measured by the
\nefficiency of the vessel engine by indicating the age of engine and the technology
\nused for design, the ship’s configuration and the degree of hull fouling as ship design
\nrelated factors. Moreover, the sailing distance, speed of vessel, vessel’s state (laden
\nor ballast conditions) and weather conditions have corresponding external effects on
\nfuel consumption (Drewry, 2007).
\nMaritime freight rates reflect the shipping companies’ total cost, which vary from one
\nfirm to another according to a company’s policy and efficiency. However, there are
\nother factors influencing the freight rate as suggested by Hoffmann (2010) as
\nfollows: first, the distances that cargo has to be moved by vessels from production to
\nconsumption areas. It is worth mentioning that doubling the sea transport distance
\nresulted in raising the transport cost by about 15-20%, which can be seen in Table<\/p>\n

1
\nThe voyage cost 40% and (fuel oil + diesel oil 76%). (0.76*40=30.4%)
\n35
\n4.3. Although the correlation between the distance and cost is relatively low, distance
\nstill has a notable impact on the transport freight rate when it is superimposed in time
\ncost. In other words, if goods are transported for the same distance but different in
\nduration, the transport cost will be different due to the factors involved to determine
\ntransport cost such as fuel consumption and speed.
\nTable 4.3 Freight Rates of Carrying a FEU from Dalian in May 2010
\nPort of
\nDestination
\nFreight
\nRates
\n$US
\nPort of
\nDestination
\nFreight
\nRates
\n$US
\nPort of Destination
\nFreight
\nRates
\n$US
\nDubai\/UAE 1200 Bahrain 1800 Tema\/Ghana 4600
\nColombo \/ Sri
\nLanka
\n1300 Um Qasr \/
\nIraq
\n3000 Santos\/Brazil 4800
\nB.Abbas\/Iran 1300 Port Sudan 3300 Valparaiso\/Chile 5200
\nCalcutta\/India 1700 Rotterdam 3500
\nSource: Hoffmann, J. (2010).
\nSecond, the vessel sizes have an impact on transport cost owing to economies of
\nscale advantages as shown in Table 4.4. Instead of transporting 100 tons, the
\nreduction of cost might reach about 40-50% when transporting 10,000 tons of cargo.
\nThe shipping lines tend to build bigger ships to reduce transport cost and offer
\ncheaper services in order to compete with other companies and modes of transport.
\nThird, the trade imbalances actuate the freight rates due to the availability of goods to
\nbe carried in both ports of origin and destination. The occurrence of imbalance for a
\ncountry’s import and export leads to receiving more cargo with loaded ships. On the
\nother hand, ships ought to find a cargo nearby otherwise they will sail in ballast
\nconditions without earning money. Therefore, the transport cost will increase,
\nespecially when the demand for transport is high with shortage of supply. Fourth, the
\nvalue and type of cargo decide the freight rates and routes also due to the insurance
\n36
\nand time factor concerned in such goods. Therefore, increasing the value of goods by
\n1%, the insurance companies increase the insurance cost by 0.3-0.4%.
\nTable 4.4 Economies of Scale in Bulk Shipping (including bunkers)
\nCargo
\nCapacity
\nDWT
\nInvest
\nment
\n$M
\nBunker
\nCons
\ntons\/day
\nOperating
\nCost
\n$m p.a
\nOperatin
\ng Cost
\n$ \/ dwt
\nBunker
\nCost
\n$ \/ dwt
\nCapital
\nCost
\n$ \/ dwt
\nTotal
\nCost
\n$\/dwt
\np.a
\n30,000 26 21 1.2 40.6 56.7 93.5 191
\n47,000 31 24 1.4 30.3 41.4 71.4 143
\n68,000 36 30 1.8 26.0 35.7 58.2 120
\n170,000 59 50 2.0 12.0 23.8 38.2 74
\nSource: Source: Stopford, M. (2009, p.225).Maritime Economics (3rd Ed).Routledge
\nFifth, the competition level among shipping companies increases the options for
\nshippers to select lower freight rates with high service level depending on the market
\nshares of carriers. Finally, the port efficiency and characteristics have a direct impact
\non ship turnaround time whereas efficient ports reduce time losses for vessels that
\nearn only while sailing.
\nRegarding cost comparison, the dissertation takes into consideration the operation
\ncost and fuel consumption as a voyage cost only for general routes as in Table 4.5.
\nOn the other hand, the port dues and canal charges will be considered for the specific
\nroute to illustrate the primary cost effectiveness for compared routes. Obviously, the
\nfuel consumption varies according to ship purpose and speed so that the container
\nvessels consume more fuel due to the high speed needed to maintain port calls
\nscheduled. Nevertheless, the value of cargo that is moved in containers is mostly
\nhigher than cargo on other types of vessels which compensates the higher operating
\nand voyage costs.
\nOn the other hand, the refrigerated cargo requires faster transport capability where
\ncontainer vessels have to compete with other modes of transport. The operation cost
\n37
\nis calculated based on the manning cost, H&M Insurance, P&I Insurance, repairs and
\nmaintenance, stores, spares and administration cost.
\nTable 4.5 The operation and bunker cost for three types of vessels.
\nVessel
\nType
\nSize
\nOperating
\nCost
\n$\/day1
\nFuel Cons2
\n.
\nton\/day
\nBunker
\nCosts3
\n$
\nTotal Cost $\/day
\nContainer
\nVessel
\nCV
\n4,048 teu 6,855 117 50,369 57,224
\nBulk
\nCarrier
\nBC
\nPanamax
\n65-73,000
\ndwt
\n5,745 33 14,207 19, 952
\nGeneral
\nCargo
\nGC
\n17-20,000
\ndwt
\n4,055 24 10,332 14,387
\nSource: Drewry Shipping Consultant Ltd. (2007) and Second IMO Greenhouse Gas Study (2009).
\nThe total cost of sea transport of different types of vessels calculated in Table 4.6
\nexcludes the port dues in the port of origin (Shanghai) and port of destination
\n(Rotterdam) because they will be similar on both routes. Moreover, the capital cost
\nand cost of periodic maintenance were also counted out.
\nThe total cost was calculated as follows:
\nTotal Cost=Voyage duration*total daily cost+ SC charges.
\nMoreover, the vessel load was assumed to be 75% of its full load because of the trade
\nimbalances and different ports of call, especially for container vessels. In other
\nwords, the total transport cost was distributed on 75% of the vessel’s full load for the
\nbulk carrier and container vessel. The attractive tariff of the Suez Canal tended to
\nencourage more traffic and bigger ships through the different pricing system<\/p>\n

1
\nOperating cost estimated by Drewry for 2008 and assumed to be the same in 2010
\n2
\nAs estimated by Stopford (2009).
\n3
\nThe price of IFO380 in Fujairah $430.50 on 30th June 2010.BWI (Bunker World Index)
\n38
\ndepending on vessel type and size. On the other hand, the compulsory escorting of
\nbigger ships by tug boats increases the transit charges in addition to waiting time for
\nentering the canal.
\nTable 4.6 Total Cost of Sea Transport via Suez Canal for Different Vessels.
\nVessel
\nType
\nSize
\nRoute via
\nSuez
\nCanal SC
\nVessel
\nSpeed
\nTime
\nDays
\nSuez
\nCanal
\ncharges1
\n$US
\nTotal
\nTransport
\nCost
\n$US
\nTransport
\nCost2
\nPer unit
\nCV 4,048 teu
\nShanghaiRotterdam
\n23
\n18
\ndays
\n21
\nhours
\n248,298 1,564,450
\n515
\n$\/teu
\nBC
\nPanamax
\n65-
\n73,000
\ndwt
\nShanghaiRotterdam
\n14
\n30
\ndays
\n23
\nhours
\n215,897 830,409
\n15
\n$\/ton
\nGC
\n17-
\n20,000
\ndwt
\nShanghaiRotterdam
\n12
\n36
\ndays
\n3
\nhours
\n67,920 585,852
\n34
\n$\/ton
\nSource: Suez Canal Authority (2010) and Author.
\n4.2.2 Inland Transport Cost
\nEssentially, an efficient transport system is important for cost reduction and customer
\nsatisfaction to provide competitive services. The demand for such significant
\ntransport systems has increased in the last decades which placed strong demand on
\nextra infrastructure and shifting of cargo between modes of transport. Although there<\/p>\n

1
\nOnly transit cost taken into consideration without any extra charges
\n2
\nAssumed the vessel loaded with 75% of its total capacity for Container and Bulk carriers.
\n39
\nare several factors affecting the transport mode selection, such as cost effectiveness,
\neconomies of scale and environmental concerns, the accessibility to consumption
\ncenters by trains and trucks secured the desirability of inland transport. The different
\nfunctions of transport modes together with logistics development imposed transport
\nintegration. Such a transport network should have significant control on costs and
\nquality of services. On the other hand, the huge infrastructure needed obliged the
\nnational governments to invest sufficiently because of the substantial role of
\ntransport as the country’s backbone.
\nSimilar to sea transport, inland transport costs are divided into: First, capital cost for
\ninfrastructure construction for railroads as well as highways. The capital cost
\nincludes train wagons, building railroad infrastructure, railway stations and all
\nfacilities installed for operating the trains. On the other hand, inland trucking
\ntransport includes the cost of trucks, pavement of roads and all junctions with other
\nmodes of transport. Second, operation and maintenance costs such as fuel,
\nmaintenance and manning for both railways and trucking transport (Blauwens,
\nDeBaere &Voorde, 2002). In addition, the congestion cost caused by the decline of
\nspeed of traffic due to going beyond the capacity of infrastructure, which influences
\nthe total cost.
\nThe infrastructure cost is the crucial element of the total supply chain cost in addition
\nto malfunction cost resulting from road and rail accidents, which add extra costs on
\ntransport. Therefore, the multiplicity of cost components and objectives of inland
\ntransport systems resulted in complicated transport pricing. The impact of the
\ntransport sector on the social life of people, environment and economy has promoted
\nthe interest of developing the services and to look over the sustainability of an
\nefficient transport system. Owing to huge infrastructure needed for inland transport,
\nsuch as highways, railroads, bridges, piers, locks and tunnels, the inland transport is
\nconsidered to be more expensive but faster compared with sea transport (Muller,
\n2010). Moreover, the significant advantage of economies of scale that sea transport
\n40
\nbenefits from resulted in cheaper services. On the other hand, the transport speed
\nfactor Helped the inland transport to be preferable in situations where a particular
\ncommodity ought to be handled within a short time.
\nConsequently, the high prices of transport services reflected the engagement of
\nseveral cost elements that require government subsidies to strike a balance between a
\nmore equitable distribution of resources among people and the need for stimulating
\nan efficient transport system.
\nRegarding the new route, the inland transport efficiency and reliability are the key
\nfactors of the prosperity of the route for being comparable with existing routes. Thus,
\nthe cost comparison of cargo transport provides a thorough understanding of the
\nprice differences of combined MT, as shown in Table 4.7.<\/p>\n

Table 4.7 The Combined cost of Sea\/Land transport
\nVessel
\nType
\nRoute via
\nIraq and
\nSyria
\nSea
\nTransport
\nCost
\nLand
\nTransport
\nCost $US
\n(Truck)
\nLand
\nTransport
\nCost $US
\n(Rail)
\nCargo
\nHandling
\nCost
\nAnd Port
\nDues
\n$US
\nTotal
\nCost1
\n$US Transport
\nCost per
\nUnit
\nCV ShanghaiRotterdam
\n972,808 2,621,849 1,376,471 575,972 2,925,251
\n923
\n$\/teu
\nBC ShanghaiRotterdam
\n558,656 4,096,639 2,150,735 509,670 3,219,061
\n55
\n$\/ton
\nGC ShanghaiRotterdam
\n467,577 1,071,429 750,000 173,319 1,390,896
\n69.5
\n$\/ton
\nSource: Iraqi Inland Transport Company (2009), GCPI (2010) and Author.
\nInterpreting the cost calculations in both tables (4.6 and 4.7) illustrates the cost
\neffectiveness of existing routes when taking the cost in separation from other<\/p>\n

1
\nPort Dues, land transport cost considered the same in Iraq and Syria
\n41
\ninfluential factors. The existing route’s total sea transport cost for different kinds of
\ncargo gives a logical appearance of low transport cost compared to the proposed
\nroutes. The transport cost of transporting one TEU via the Suez Canal is $515 taking
\ninto consideration only the operating cost and voyage cost and leaving aside the
\ncapital cost in order to seek a comparison. On the other hand, the cost of moving one
\nTEU through the new route would be $923, which exhibits the additional cost of
\ntransport in the current situation and price comparison. However, the numbers are
\nnot 100% accurate due to the unavailability of information about current Syrian
\ninland transport costs, port dues and other cost elements. The scenario applies to the
\nvariation of transport cost for bulk cargo between the existing route and the proposed
\nnew one. However, the calculations primarily show a deviation of inland transport
\nfor bulk cargo that is a greater cost than inland transport for containers. The total cost
\nconsidered was the railway transport cost for the inland part of cargo movements as
\npart of the total transport chain from China to the Netherlands for the suggested route
\ncost calculations.<\/p>\n

Table 4.8 Cost Comparison for cargo transport through two route options
\nTotal Time
\ndays
\nCost via Suez
\nCanal
\nTotal Cost via new
\nVessel route
\nType
\nRoute
\nVia
\nSC
\nNew
\nRoute
\nTotal
\nPer
\nunit
\nTotal
\nPer
\nunit
\nCV
\nDubaiRotterdam
\n11 8 877,762 289 2,410,235 756
\nBC
\nDubaiRotterdam
\n18 12.5 575,033 10.4 2,909,805 51.4
\nGC
\nDubaiRotterdam
\n21 14.5 370,047 18.5 1,131,930 56.6
\nSource: Suez Canal Authority (2010), Iraqi Inland Transport Company (2009), GCPI (2010) and
\nAuthor
\n42
\nFor regional transport, the cost analysis of transporting different kinds of goods from
\nDubai in the UAE to Europe demonstrated the higher cost of MT using the new
\nroutes. Although the new route has an advantage of saving time, which affects the
\ntotal sea transport cost, the expensive inland transport increases the total cost and
\nreduces the benefits of saving time for the integrated transport system (Table 4.8).
\nObviously, the second option of the new suggested route via Turkey to the eastern
\npart of Europe will be even more expensive than the first option due to longer inland
\ntransport distances for cargo. As mentioned earlier, the cost is not the only decisive
\nfactor of route selection, though it is the most important one, especially for shippers’
\nand carriers’ concerns, but many clients would like to pay more for the time factor,
\nreliability, and service level. Therefore, other factors have to be discussed in this
\ndissertation to provide comprehensive recommendations for carriers whether or not
\nthe new route is beneficial for them and the total transport system.
\n4.3 Crude Oil Transport
\nThe major product of the Middle East region is mainly crude oil, which can be
\ntransported by different modes of transport depending on transport distance. Oil
\ntankers are a desirable means of transport for crude oil between continents because it
\nis considered as a cheaper mode of transport for such long distances. On the other
\nhand, pipelines are the most significant transport mode between countries such as the
\nEuropean inter-continental transport of oil by pipelines. Obviously, crude oil carriers
\nhave been getting bigger to carry more cargo and taking advantages of economies of
\nscale. Therefore, the serious pressure on the Suez Canal and the Panama Canal to
\nextend their capability of allowing bigger ships has lead to investing huge amounts of
\nmoney for such extensions.
\nRegarding oil transport, the new route has advantages to compete with the existing
\nSuez Canal route if the crude oil is transported by pipelines from Iraq to Europe via
\nSyria. The long distance of sailing from the Arabian Gulf through the Suez Canal
\n43
\ncontributes in higher costs of transport, whereas the new route would shorten the
\ndistance. Moreover, the added cost of Canal dues for transiting the Suez Canal
\ncannot be seen in the case of the new route, which would make it more preferable as
\na cost effective corridor. In the current situation, Iraq exports its oil from northern oil
\nfields by pipelines to the Mediterranean via the port of Ceyhan in Turkey. There are
\ntwo pipelines between Kirkuk in Iraq and the port of Ceyhan in distance of 600
\nmiles1
\n, designed to transport about 1.1 million barrels of crude oil per day (Kumins,
\n2006). These pipelines are playing a crucial role for an efficient mode of transport
\nand economically beneficial for both countries (Iraq and Turkey). The distance
\nbetween Kirkuk and Tartous in Syria is about 480 miles, which is shorter compared
\nwith existing pipeline routes, but the political disputes between Iraq and Syria in the
\npast impeded the cooperation to construct pipelines. The situation in Iraq will
\nprobably lead to more understanding for developing crude oil transport between Iraq
\nand Syria, which serves the economy of both countries. For exporting crude oil from
\nsouthern oil fields, the oil terminals in the Gulf are loading about 80% of total
\nexports to different markets (IOM, 2010).
\nPipelines transport is considered to be cost effective in terms of transport cost and
\noperation because usually the maintenance cost is very low as well as the operation
\ncosts. Moreover, the time of transport is relatively constant in normal conditions
\nwhen the pumping system is well maintained and operated. The investment of
\nbuilding the infrastructure and superstructure for pipelines transport is relatively low
\ncompared to other modes. In comparison with other modes, pipelines are not
\nsuffering from problems of delays for the transit of cargoes across borders in addition
\nto the documentation procedures of customs clearances. Moreover, crude oil can be
\ntransported by pipelines from the fields to the refineries without the need to go
\nthrough ports or terminals.<\/p>\n

1
\nBritish mile= 1.609 km
\n44
\nThe mentioned limitations of draught in the Suez Canal, forced the ULCC tankers to
\nsail via the Cape of Good Hope and also the security instability in the Gulf of Aden
\nencouraged smaller tankers to change their routes. The suggested new route can be a
\nviable alternative for the transport of Arabian Gulf countries’ oil to Europe and the
\nUS. Oil can be transported from Iraq by pipelines via Syria to be loaded in oil tankers
\nin the Mediterranean to be moved to final destinations. Of course, the efficiency and
\ncapacity of the loading terminal together with pipelines will have a considerable
\nimpact on the competitiveness of the new route with the Suez Canal.
\nIn addition, pipeline transport is considered to be friendlier to the environment
\ncompared to other modes of transport, such as sea, road, and railway transport, which
\ngives an advantage and competitiveness with other modes as well as the Suez Canal.
\n4.4 Suez Canal Capacity and Efficiency
\nTogether with the Panama Canal, the Suez Canal plays a crucial role in global
\nmaritime transport. The Canal served the shipping industry by connecting the
\nEuropean markets with Asia, which Helped the ship owners to take benefit of a
\nshorter route compared with sailing around the Cape of Good Hope. Moreover, the
\ngeographical location of the Suez Canal, which connects the Indian Ocean with the
\nAtlantic Ocean through the Red Sea and Mediterranean respectively, distinguished it
\nto be economically significant.
\nThe development of vessel sizes encouraged the enlargement of the Suez Canal
\naccordingly. The largest ships able to pass through the Canal when it was opened in
\n1869 were of 5000 tons. Today, ships of 240,000 DWT and draught of 22 meters can
\npass through the canal properly. The total length of the SC is 193.3 km, and it takes
\nabout 12-16 hours to transit the Canal. Due to the limitation of the Canal’s width, the
\nSuez Canal navigation rules impose a convoy system to manage vessels’ sailing.
\nThere are three convoys for ships passing the Canal, two southbound convoys from
\n45
\nPort Said at 00:00 hours and 07:00 hours and one northbound from Suez at 06:00
\nhours (Suez Canal Authority, 2010).
\nFor such limitations, the SC is limited to receiving 81 vessels per day, which can be
\nconsidered as an opportunity for the new route to share the extra traffic in case of
\nexceeding the Suez Canal capacity. Although the figure in Suez Canal reports shows
\nthat the traffic has not reached this limit, the trade and maritime industry are always
\nchangeable to reshape a new market and demand which might increase the number of
\nvessels that wish to pass through the Canal. Moreover, the waiting time for vessels
\nthat have arrived after the convoy departure time adds extra cost on transport, which
\nwas not taken into account in the total cost calculations, because it is variable.
\nNevertheless, the current situation of the Suez Canal is that it is considered to be
\nmore desirable due to the cost effectiveness compared to other routes.<\/p>\n

4.5 Regional Integration and Crossing Borders
\nDue to the Iraqi location, the suggested route has to pass through the borders with
\nSyria for both southbound and northbound transit of cargo connecting the
\nMediterranean with the Arabian Gulf. On the other hand, Iraq has a border with
\nTurkey to be transited when moving cargo between Europe and Asia via Iraq and
\nTurkey. The increasing stability of the region will presumably result in redirection of
\nexisting international trade flows toward more convenient routes, which up to now
\nhave been barred for political reasons or threats of wars.
\nCurrently, the security situation is deeply affecting the border crossing processes,
\nwhich increases time spent at borders for cargo inspections, resulting in high
\ntransport costs. Despite that, the future improvement of the security situation and
\nreforming regional cooperation can probably lead to development of smooth transit
\nof goods. Historically, Iraq was an inland transit route from the Arabian Gulf to
\nEurope and from Saudi Arabia to Turkey (IMOP, 2008). The project ( help with nursing paper writing from experts with MSN & DNP degrees) of new routes
\nrequires involvement of regional governments in planning, design, execution,
\n46
\nmaintenance, and operation in the transport sector to overcome the current
\nbottlenecks.
\nIt is worth mentioning that during previous wars between Iraq and Iran, goods were
\nmostly imported through Jordan and Turkey by inland transport. Moreover, the
\nSyrian approach was used to transport cargo to Iraq during the embargo. In other
\nwords, the regional governments have been cooperating to redirect the transport
\nflows according to their needs. Likewise, such cooperation resulted in producing a
\nsort of standardization of railway gauging between Iraq and Syria. On the other hand,
\nthe existing inland transport infrastructure is insufficient to cope with the proposed
\nvolume of traffic. For an efficient transport system, the necessity of smooth cargo
\nflows requires eliminating constraints in order to have a developed multimodal
\ntransport network. Consequently, identified essential requirements for trade
\nfacilitation are the need for deregulating the integrated regional transport system and
\nimplementing a common transport policy that has to be agreed by these countries.
\nAccording to Hoffmann (2010), the standardization of cargo movement processes,
\nprocedures, documents and information will improve the cargo flows at the countries
\nborders. This can be achieved through harmonizing the national procedures and
\nprocesses with international standards and regulations. Moreover, developing
\ntransport procedures and simultaneously simplifying them anticipates the elimination
\nof excessive elements and duplications of formalities. In addition, travel time
\nreduction is a crucial element in transport costs, which includes the time for crossing
\nthe borders to exchange the documents and security checks.
\nAccomplishing a reduction of the time factor is a significant issue in a contemporary
\nmultimodal transport system. Also, the practices of different authorities at borders
\nmight be the constraints that are impeding the cargo flows from delivering
\nimpeccable on time services to the clients. In such circumstances, the transport and
\nlogistics costs will increase and also create unreliability of service scheduling by
\n47
\ncarriers. Previously, the calculations of land transport considered one day for the
\ntransit time of cargo from Basra (Iraq) to Tartous (Syria) assuming crossing the
\nborders would run without stoppage. On the contrary, there is currently border
\ncongestion due to the mentioned situation so that the transit time could be more than
\none day, which will increase the total inland cost.<\/p>\n

For the suggested routes, easy crossing of the borders would make a fundamental
\ncontribution to the competitive transport network. In addition, the smooth and
\nprompt proceeding of goods across borders gives the suggested routes comparative
\nadded value and also increases the costumers’ satisfaction level. It is obvious that the
\nrailways transport can play an important role for minimizing transit time, if there is a
\ncooperative operation and control by the two governments (Iraq, Syria). Both
\ncountries are getting economic and social advantages from developing a cooperative
\nmultimodal system so they have to emphasize on evolving transport related matters
\nwith similar concern. As a matter of fact, the Customs system can play a discrete
\nfunction to facilitate the cargo movement through the borders by having sufficient
\ncooperation between customs authorities in all countries which take part in such MT.
\nFor instance, the intelligence customs system is considered to be the prosperity
\nfeature of multimodal transport in the European Union. The customs activities and
\nprocedures might cause delays for cargo flows such as bottlenecks, yet they may
\neffectively leverage transport clients by using developed technology and information
\ninterchange.<\/p>\n

Coherent regional trade encounters the need for well developed transport facilitation
\nfor international movement of cargo. Moreover, the need for trade liberalization and
\nfree trade among regional countries urges the regulators and decision makers to take
\nrunning and operating the business jointly into consideration. Therefore, there are
\nseveral dialogs between regional countries (Iraq, Syria and Turkey), which started
\nrecently to develop a free trade region and the MT system.
\n48
\n4.6 Port Efficiency and Cargo Handling
\nPort throughput and efficiency have a distinct impact on transit time of goods and
\ntotal transport cost. Although the geographical location of a port has a significant
\neffect on its attractiveness, the efficiency of cargo handling services of ports that are
\nconnected to efficient hinterland connections became the interest of shippers and
\ncarriers (UNCTAD, 1999). For the suggested routes, ports are crucial elements to be
\nconsidered for analyzing the total transport cost and transit time. Shipping companies
\ntend to minimize the number of port calls to reduce transport cost and time that is
\nconsumed for cargo handling. In particular, the selection of hub ports by container
\nvessels mostly depends on the cost effectiveness of a port and its productivity. Of
\ncourse, such challenge for the new route will affect the carriers’ choices whether they
\nwill continue to use the existing Suez Canal route or not. Unless the port operators in
\nboth countries, Iraq and Syria, prove with evidence that cargo flows will run
\nsmoothly, ports are perceived to be bottlenecks for the new MT.
\nIn Table 4.1, the transit time differences between the Suez Canal route and new route
\nwere about two days in favour of the new route without taking the cargo handling
\nand ships berthing\/unberthing time into account. If the vessel spends one day for
\nunloading the cargo in the suggested new port in Iraq and one day for loading the
\ncargo again in the port of Tartous, the transit time is going to be the same for the new
\nand existing routes. On the other hand, for transporting goods to Europe via Turkey
\nby inland transport there will be one cargo handling activity taking place in the port
\nin Iraq, which leads to reduced transit time. In such case, the port performance and
\nproductivity are assumed to be extremely good by port operators through the latest
\ndeveloped cargo handling equipment to minimize the transit time as much as
\npossible. Moreover, the partnership between the public and private sectors has an
\nimportant influencing impact on major port investment and operation. The
\ndissertation is going to discuss the current situation of Iraqi ports in detail in the
\nupcoming chapter.<\/p>\n

49
\n4.7 Factors influencing the competition with the Suez Canal
\n4.7.1 Security Concern
\nRecently, piracy in the Gulf of Aden and along the Somalia coastline has widened an
\nalarming deterioration of the security situation for vessels passing through the Suez
\nCanal as shown in Figure 4.6. Consequently, the international trade is directly
\naffected by increasing international transport costs, which have become more
\nexpensive due to the serious increase of insurance cost. In addition, the employment
\nof security guards onboard ships and paying ransoms have added extra voyage cost
\nin order to avoid the piratical attacks. The number of successful vessel attacks and
\nattempts has risen over the last years due to the instability of the political situation.
\nThe impact of such a threat may encourage the carriers to find other alternatives, as
\nIMO (2008, p.2) stated, ” without adequate and coordinated protection for shipping,
\nthe current situation of Somalia might cause ship operators to avoid transiting
\nthrough the Gulf of Aden, using the Cape of Good Hope instead”
\nFigure 4.6 The number of Piracy attacks divided by regions in 2009
\nSource: IMB’s annual report (2010, January)
\n50
\nIn addition, the piracy attacks endangered innocent seafarers from different parts of
\nthe world, which may also lead to increasing the insurance cost for personnel as well
\nas their salaries. Generally, the global trade will be affected if the piracy
\nphenomenon continues. Obviously, the alteration of sailing routes via the Cape of
\nGood Hope will increase transport time and cost. In such a situation, the new
\nsuggested route may play an important role for cargo movement between the Far
\nEast and Europe. On the other hand, the current situation in the region, particularly in
\nIraq, is facing several difficulties which can act as obstacles for the transport system.
\nAs mentioned earlier in Table 4.3, the high freight rates for moving cargo to Iraq
\nresulted from the risks associated with the security situation, which caused insurance
\ncompanies to claim higher insurance premium to compensate for unforeseen losses.
\nOther most frequently expected problems are the damage or loss of cargo during its
\ninland movement, which might add extra costs. Hence, the competitiveness of the
\nnew route with the Suez Canal depends on the improvement of the security situation
\nto reduce additional transport cost and introducing a developed and efficient MT
\nsystem in the region.
\nRegarding security, both routes have competitive pros and cons. The existing route is
\nthreatened by piracy attacks and hijacking of ships sailing in the Gulf of Aden in
\nspite of the international efforts to enforce international laws and regulations.
\nHowever, the success of the new route depends on the stability of the security
\nsituation in the region.
\n4.7.2 Environmental Concern and Air Pollution
\nGases that are emitted from ships’ engines can be categorized into three main
\npolluting substances: Nitrogen Oxides (NOx), Sulphur Oxides (SOx), and Carbon
\nDioxide (CO2) (Alexandersson, 1991). Maritime accidents may cause huge damage
\nto the environment, which affects the ecosystem due to oil spills resulting from
\nvessel collisions and grounding and gas emission from ships. Heretofore, the
\nshipping industry has reasonably been considered as the least polluting mode of
\n51
\ntransport in terms of air pollution (IMO, 2008). Emissions from ships can be caused
\nby emission of exhaust gases, cargo emissions, emissions of refrigerants and other
\nemissions (IMO, 2009).The quality of fuel used for the propulsion system and
\ngenerating electivity has an impact on the air quality and gas emissions. Therefore, a
\nnumber of countries have insisted that shipping companies use high quality fuel with
\nlow sulphur contents, such as the Sulpher Emission Control Area (SECA) in the
\nBaltic Sea. The dissertation attempts to evaluate the environmental impact of the new
\nroute on air quality to estimate the significance of the suggested MT.
\nA significant potential for reducing the CO2 emission is attainable through a
\ncombined transport system. From Table 4.9 it is obvious that the new route has an
\nadvantage of being more environmentally friendly in terms of CO2 emissions for
\nintegrated sea and rail transport compared with road transport
\nTable 4.9 CO2 emission comparison between existing and new routes
\nTransport
\nmode
\nUnit
\nVolume
\nof CO2
\ng\/t.km1
\nDistance
\nShanghaiRotterdam
\nVia SC
\nkm2
\nCO2
\nemission
\nkg\/ton
\nDistance
\nShanghaiRotterdam
\nVia new
\nroute km
\nCO2 emission
\nkg\/ton
\nshipping3 38 19277 732.5 17359 660
\nRailroad 120 1250 150
\nTruck 180 1250 225
\nShip+ hip+ S
\nrail trucks
\nTotal
\nCO2
\nem s ission
\n732.5
\n810 885
\nSource: IMO (2009). Second IMO GHG Study. Marine Environment Protection Com e.
\nterland
\nconnections without suffering from traffic congestion as in road transport. However,<\/p>\n

mitte
\n. Railway transport is mostly desirable because of its accessibility to hin
\n1
\ng\/t.km=grams of CO2 per ton of cargo transported on kilometer. 2
\nDistance is converted from nautical miles to km.
\n3
\nCO2 emission from Container vessels.
\n52
\nthe gas emissions caused by cargo handling operations and maneuvering operations
\nwith tug Helpance have not been measured, which will increase the quantity of CO2
\nemissions. On the contrary, trucking transport combined with sea transport causes
\ngreater amounts of CO2 emissions, which are undesirable for green transporters and
\ninternational concerns due to its effect on global warming and climate changes. In
\ngeneral, the CO2 emissions from ships transiting through SC are less than new route,
\nwhich gives competitive advantage for the existing route. However, road transport is
\nmaking considerable efforts to reduce the GHG emission comparing with sea
\ntransport due to the lifespan of trucks being much shorter than ships and the
\npossibility of applying latest technology happening with road transport (Cariou,
\n2010a). Developing the MT system for the new route would introduce a competitive
\ntransport system to serve moving goods by greener modes of transport. The
\ncalculations of CO2 emissions based on container vessels, which are the highest
\nemitting type of vessels compared to others like tankers and bulk carriers.
\nConsequently, the transport of goods by those ships will produce less emission than
\ncarrying goods by container vessels giving more advantages to the existing route in
\nterms of CO2 emissions.
\nFurthermore, ports can play an important role in eliminating the impact of GHG
\nemissions through a decent environmental policy and strict legal instruments. For
\nexample, cold ironing might be provided for vessels to reduce exhaust gases
\ngenerated from auxiliary engines for generating electricity when ships are berthed.
\nNevertheless, the shore power supply price is double or more compared with the
\nprice of electricity generated by ships auxiliary engines (Helsinki Commission,
\n2005). In addition, the Arabian Gulf region is rich in oil resources, which enables
\nthem to offer high quality fuel with appropriate prices to attract more traffic and
\nreduce gas emissions. An efficient port can ensure effective ship turnaround time by
\nminimizing waiting time, cargo handling time and time for delivery of goods. For the
\nland side, the smooth flows of goods through ports contribute to protecting the
\n53
\nenvironment from damage caused by road congestion, which increases fuel
\nconsumption and gas emissions.
\nOn the other hand, the usage of the Suez Canal is playing a significant function in the
\nted
\nf global warming, melting of the ice in the Arctic Ocean has been
\n3 Economies of Scale
\ndvantage of increasing the transport mechanism in the
\nshipping industry to be cheaper than other modes taking advantage of economy of
\nsense of shortening sailing distances and fuel consumption to reduce transport cost as
\nwell as gas emissions compared with old routes. The estimation of gas emissions is
\ndifficult due to the uncertainty of transit time on both routes and also the waiting
\ntime in the Suez Canal and new route. Moreover, the engine efficiencies and speed of
\nships and railways can have a strong effect on the quantity of air polluting gases.
\nFor competition, both the Suez Canal authority and the operators of the sugges
\nnew route can initiate a green tariff with an environmentally friendly pricing system
\nin order to contribute to eliminating air pollution and become more environmentally
\ncompetitive.
\nAs a result o
\nintriguing shipping lines to pass through the northeastern passage. This route will
\nshorten the sailing distance between European ports and northern Asia by up to 50%
\ncompared to the Suez and Panama Canal routes, taking only 15 days (Peresypkin and
\nVasilyev, 2009). In this regard, the usage of that route will threaten the Suez Canal
\ntraffic as well as the new suggested route due to the time saving and cost
\neffectiveness of the northeastern routes. However, this situation cannot be seen in the
\nnear future, because that route is still unsafe for ship navigation due to the presence
\nof ice and its hidden risks. Therefore, the Suez Canal remains the most beneficial
\nchoice compared with other sea routes due to its comparative advantages mentioned
\nearlier.<\/p>\n

4.7.
\nAs mentioned before, the a
\neconomy of scale proved by lower transport cost per unit was shown in Table 4.4.
\nMoving cargo by sea transport with bigger vessels afforded preference for the
\n54
\nscale. In particular, transfer of goods between continents and over long distances is
\nmostly accomplished by ocean going vessels especially for low value cargo. This
\nillustrates that the usage of the Suez Canal is cost effective in the sense of economy
\nof scale for shipping. However, the limited capacity of rails and trucks could have
\nconfined the ability of inland transport to transfer all amounts of goods transported
\nby ships. Even if a new MT system successfully managed to compete with the Suez
\nCanal route, it could not be a complete substitute due to the limited capacity of
\ninland transport. Of course, it can be expanded to the extent of higher capacity to
\nshare some traffic with the Suez Canal, yet it would be impossible to convey about
\n335 million tons of cargo that passed through the Suez Canal in 2009 by inland
\ntransport (Suez Canal Authority, 2010).
\n4.7.4 Bunker prices
\nBunker price is obviously the most crucial element of transport cost, as discussed
\npreviously. For a country like Iraq, which is one of the most oil-rich countries, the
\nGovernment can take practical measures to support the transport sector, particularly
\nthe MT system in the country, through the reduction of fuel prices. This would
\nreduce transport costs in general and give the status of competitiveness with other
\nroutes.
\nIt is natural that high fuel prices directly benefit the country, but long-term project ( help with nursing paper writing from experts with MSN & DNP degrees)s
\nsuch as sustainable transport are also considered beneficial for job creation for
\ncitizens which are admirable investments compared with incomes derived from oil.
\nThere should be an in-depth study on the impact of lowering oil prices in the sense of
\nattracting ship owners through the provision of coherent evidence that these
\nmeasures will reduce transport costs for them. Iraq can do that even in the
\nMediterranean Sea through transferring fuel by pipelines to Syria and providing
\nbunkers for ships loading and\/or unloading the cargo there. Therefore, Government
\nsubsidization of bunker prices can act as a key factor of the competitiveness of the
\nnew route.
\n55
\nChapter 5
\nAnalysis of the Significance for Iraq of the New Route
\n5.1 Transport Cost for Trade between Iraq and Europe
\nThe European countries and the United States are the biggest trading partners of Iraq,
\nwhere most goods are exported to and imported from these countries. Apart from
\ncrude oil exported to these trading partners, the manufactured productions,
\nhumanitarian needs, medication and raw materials for the rehabilitation of Iraq were
\nimported from these countries. Table 5.1 shows the volume of trade exchange taking
\nplace among these partners, which clearly demonstrates the need for different means
\nof transport.<\/p>\n

Table 5.1 Iraq’s top 10 Export and Import Trading Partners, 2003
\nSource: International Monetary Fund (2003). As cited in Vivian, C. (2004). Iraq’s Trade with the
\nWorld: Data and Analysis.
\nNevertheless, the trade with the Far East countries such as Japan, China and the
\nRepublic of Korea has been growing due to the market changes and price of
\nmanufactured goods. Turkey became the most important trade partner for import and
\nexport cargo produced in Turkey as well as cargo produced in European countries.
\nThe transport of goods from Europe and American countries carried by ships would
\nbe transited through the Suez Canal or moved by land transport via Syria, Turkey and
\n56
\nJordan. The assessment and analys
\ntransporters f tries to Iraq.
\nyria, Turkey and Jordan
\ncan be committed by traders via Iraq.
\nis of cost comparison might give incentives to
\nor using a new route to move goods from European coun
\nLikewise, for transporting goods from Asian countries to S
\nTable 5.2 Transport Cost Comparison for Trade between Iraq and Europe
\nVessel
\nType
\nSize
\nRoute via
\nSC
\nTransport
\nCost per
\nunit
\nRoute via
\nNew Route
\nTransport
\nCost
\nCV
\nRotterdam- 1151 Rotterdam- 1125
\n4,084
\nBaghdad $\/teu Baghdad $\/teu
\nBC
\ndwt Baghdad $\/ton
\n–
\nBaghdad
\n34
\n$\/ton
\n65-73,000 Rotterdam- 38 Rotterdam
\nGC
\n17-20,000
\ndwt
\nRotterdamBaghdad
\n49
\n$\/ton
\nRotterdamBaghdad
\n40
\n$\/ton
\nSource: Iraqi Inland Transport Company (2009), Suez Canal Authority and Author.
\nTaking into account the transport cost calculations in Table 5.2, the shift of transport
\ndirection for cargo imported from and exported to European countries is giving
\nadvantages for the new route being more cost effective compared with the Suez
\nCanal route. The same applies for the trade between Syria, Jordan and Turkey with
\nAsian countries using the suggested corridor. The analysis of the redirection of
\nexisting international transport flows toward more convenient routes might be
\ny.
\n. For cargo transported from Rotterdam to Baghdad via Syria
\nbeneficial for global trade and transport econom
\nTransport costs are calculated for the two routes as follows:
\n1. For cargo transported from Rotterdam to Baghdad via Suez Canal
\nTransport cost= (days at sea*daily cost+ SC dues+ Land Transport1
\n)\/ no. of
\nunits
\n2
\nTransport cost= (days at sea* daily cost+ Land Transport) \/ no. of units<\/p>\n

1
\nFrom new suggested port to the City of Baghdad.
\n57
\nThe port dues in both ports (port of Tartous and port of Basrah) are not including
\ntotal cost determinations and the same tariff is considered to be applied due to
\nunavailability of data from Syrian ports. Obviously, redirecting the cargo flows in the
\nMiddle East region might create a new market due to the competitiveness of the new
\nute with the currently used one. Table 5.2 shows that the transport cost per unit for
\nhe City of
\nBaghdad is less when using Syrian ports and land transport network compared with
\nproceeding to the port of Basrah. Of c
\nSyria can represent a bottleneck for smooth flows between the two countries, which
\nshould be facilitated by suffi tion n th for go
\ntransport would also be about four days shorter compared with the existing route if
\nthe port perform o rations efficiently. Meanwhile, it has to be
\nrema sport network can redirect the carriage of
\ngoods for the re tri ve the ntial f growt
\nboundaries of
\ncilities are situated at river or river estuary locations and according to JBIC
\nrths for
\ngeneral cargo, container handling, grain and other bulk cargoes, with a designed
\nro
\nmoving one TEU from the port of Rotterdam to the final destination in t
\nourse, crossing the border between Iraq and
\ncient coopera betwee em. The time the car
\ned the carg handling ope
\nrked that an efficient integrated tran
\ngional coun es, which ha pote or economic h.
\n5.2 Current situation of Iraqi ports and approaches
\nThe topography of Iraq can be divided into three major areas, namely the Highland
\nArea of the northern region (about 20%), the Alluvial Plain Area created by the
\nTigris and Euphrates rivers in the central region (30%), and the Desert Plateau Area
\nof the western region (40%). About 70% of the whole area is characterized as a
\ntropical desert type climate with annual precipitation of 50-200mm, whilst the
\nnorthern area is categorized as Mediterranean climate, which would have annual
\nprecipitation of 400-1000mm.
\nIraq has a short coastline of about 48 km lying between the national
\nIran and Kuwait, with all its ports situated within the Al Basrah province. Almost all
\nport fa
\n(2006) can be territorially divided into four major areas:
\n1. The Um Qasr Area is Iraq’s biggest sea port facility consisting of 22 be
\n58
\nwater depth of 12.5 m. The port is located on the Khor Abdullah Channel at a
\ndistance of 56 nm from its entrance.
\n2. The Khor Al Zubair Area is situated 20 km north of the port of Um Qasr; the
\nKhor Al Zubair Port facility was constructed as a Free Economic Zone (FEZ)
\nand industrial port with 12 berths of 12.5 m designed depth. The port was
\nconstructed between the years of 1975 and 1980 and is designed to handle
\ngeneral cargo and specialized bulk materials, such as fertilizer, phosphate,
\npetrochemicals and export scrap iron together with iron ore imports.
\n3. The Al Faw Area is on the western bank of the lower Shatt Al Arab Channel.
\nPort facilities in this area consist mainly of oil unloading jetties and are utilized
\nto refuel the Iraqi fishing fleet.
\n4. The Al Maqal (Basrah) and Abu Flus Area is located on the western bank of the
\nupper Shatt Al Arab Channel. The port of Abu Flus contains 3 berths with
\nmaximum draft of 5.2 m at the river bar handling traditional general cargo and
\nRORO, whilst Al Maqal Port contains 14 berths but its traffic is very limited
\nbecause the access to the port is cut off by a pontoon bridge down river.
\nFigure 5.1 Locations of Major Ports in Iraq
\nSource: JBIC, 2006
\n59
\nIn a
\nand e Gulf for exporting crude oil as shown in
\nWit
\nAra
\nThe
\nwhi handle the
\nQas
\norig of an urgent dredging project ( help with nursing paper writing from experts with MSN & DNP degrees) by the UNDP in
\nleve
\nthe
\nbas
\nsec
\nIn the past, the operational efficiencies of Um Qasr and Khor Al Zubair ports fell
\nwell below their potential capabilities because the channel and berth depths were too
\nshallow to accommodate large, deep draught vessels. Moreover, the difficulties of
\nchannel accessibility because the wrecks of ships sunk during the previous
\nsuccessive wars impeded ships’ safe navigation when entering the ports. In addition,
\nthe lack of cargo handling equipment caused by the embargo resulted in a decrease in
\nthe efficiency of the ports. As a result, major cargoes required for the northern part of
\nIraq and the capital region of Baghdad have to be imported through Aqaba Port in
\nJordan and large vessel shipments for the southern part of Iraq via neighboring
\nKuwait. Transport distances for imported goods are, consequently, longer and with
\nce of trucks at the borders. The high
\ntransport costs resulting from importing goods through neighboring countries are
\nthen passed on to the Iraqi inhabitants in higher prices for imported commodities.
\nddition to the ports described above, there are also two oil terminals (Al Basrah
\nAl Amaya) located in the north of th
\nFigure 5.1.
\nh the exception of the port of Abu Flus, the capabilities of ports in the Shatt Al
\nb Channel were seriously hindered following the Iran-Iraq War of 1980 to 1988.
\nmajority of trade was transferred to the ports of Um Qasr and Khor Al Zubair
\nch remained relatively undamaged during that conflict. In order to
\nlarge volume of essential goods needed for the Iraqi reconstruction, these ports (Um
\nr and Khor Al Zubair) have recently been rehabilitated to be restored to their
\ninal capacity. Since completion
\n2003, 50,000 dwt size vessels have been able to enter Um Qasr Port at the high tide
\nl and the function of the port has been recovered to a limited extent. However,
\nrequired water depth was not achieved for the whole area of the channel and port
\nin, and consequently, the utilization of cargo handling is only 50% of the port
\ntor’s former capability (JBIC, 2006).
\ndelays for inspection and customs clearan
\n60
\nIn response to the urgent need for transport system improvement, it has been decided
\nby the Iraqi Government that extraordinary efforts must be made for the purpose of
\ndeveloping the transport sector. This was illustrated by examining possible ways for
\neveloping port approaches, ports and inland transport connections. The Government
\nractical steps which were demonstrated by
\ncreased traffic and income. Nevertheless, the ports and transport system still need
\nire
\ndeeper water. Shipping companies and ship masters are concerned about the safety
\nd
\nhas realized that the transport sector needs significant resources and policy changes
\nin order to cope with regionally and internationally evolving standards to enable Iraq
\nto leapfrog over rivals in this sector by adopting the latest technology and a desirable
\nbusiness environment through adopting a proper policy and regulatory framework
\n(IMOP, 2008). Consequently, the capital and maintenance dredging activities
\ncontinue ongoing in order to deepen the berths and channels to enhance the ability of
\naccommodating bigger vessels taking advantages of economies of scale. Moreover,
\nmost of the wrecks have been removed, particularly from the Um Qasr and Khor Al
\nZubair channel, which were functioning as obstacles for navigation (GCPI, 2010).
\nIt is worth mentioning that tangible results have been noted for the capacity building
\nof the transport system due to these p
\nin
\nto be developed in an appropriate and effective manner in order to confirm their
\ntechnical, economical, and environmental soundness. An identification of bottlenecks
\nimpairing the transport functions would result in restoring the ability to attract cargo.
\nTherefore, this dissertation attempts to identify and analyze the bottlenecks in order
\nto have a clear idea about the need for improving the existing transport system or
\ninvesting in the new route.
\n5.3 Identification of Bottleneck for Iraqi Transport System
\n5.3.1 Port Accessibility and Safe Navigation
\nKeeping approaches and berths in appropriate depth is necessary to improve the
\nability of ports to receive several sizes of ships due to the tendency of building
\nbigger ships, especially oil tankers, container ships and bulk carriers, which requ
\n61
\nof their ships and environmental damage because of groundings in shallow water,
\nwhich will have an impact upon the hull in addition to engine problems and the
\nenvironment.
\nIf ship owners expect that problems would occur to their vessels while carrying
\ncargo proceeding to ports, they will certainly change the destinations to protect ships
\nfrom any danger. As a normal result, a port would lose its clients, who will attempt
\nto find other ports that offer good facilities. However, for monopolistic services,
\nshipping companies are obliged to use smaller ships with shallower drafts to avoid
\ngrounding in port approaches, but they will lose the benefits of economies of scale as
\nshown in Table 5.3. This would lead to high freight rates and expensive transport
\nservices paid by the consumers. However, the port dues depend on ships’ gross
\ntonnage (GT) so that the port income will decrease and suffer from economic failure.
\nFor example, a bulk carrier with an 11m draft can carry about 57,000 tons of grain.
\nReducing draft to 10m, the cargo will be reduced to 48,000 tons, which results in
\nloss of 9,000tons of cargo of the ship’s carrying capacity.
\nTable 5.3 Maximum and Average ship sizes called Port of Um Qasr in 2004 and
\n2005
\nSource: JBIC, 2006
\nIn general, the Iraqi waterways and port approaches are in urgent need of capital and
\nmaintenance dredging because of extensive sedimentation. The main commercial
\nport constitutes an important infrastructure link for the economic revival of Iraq, and
\nthe sedimentation problem is creating a serious obstruction to efficient and cost
\n62
\neffective port operations. It has been estimated that it will require capital dredging in
\nthe order of 24million.m3
\nand a yearly maintenance dredging of around 11million.m3
\nto re-establish the design depths for all of the Iraqi major ports (Hassan, Abild &
\nn to land washing before
\nultivating it; then the drain water returns back into the rivers with sediments
\nperiod as mentioned before. This periodic problem of deterioration of the
\nchannel and port depths is considered to be a big challenge for the performance and
\nefficiency of the ports. Therefore, the need for a deep-sea port urged the decision
\nmakers to meditate seriously how to overcome such challenges.
\nPreviously, the poor condition of navigation aids, the presence of wrecks and
\nsiltation of the channel presented major hazards to shipping and limited the
\noperational capabilities of the ports due to the restricted sizes of vessels that are able
\ns. Moreover, such conditions of unsafe navigation discouraged the
\nJorgensen, 2006).
\nAs a result of the natural shaping of the seabed in the north of the Arabian Gulf,
\nwhich is like a soft mud in addition to dust that comes from the desert, and because
\nof the high speed currents (4-5knots), the sediments will be solicited and carried by
\nthese currents during the high tide period toward ports. When the water loaded with
\nsediments reaches the port area, the currents start to slow down in the slack water
\nperiod; consequently, the heavy molecules of sediments will fall down on the river
\nbed and thus day by day the river depth decreases. The second reason is due to the
\nconnection between the Tigris and Afloat rivers, which spring from Turkey and
\nSyria respectively. They run across from the north of Iraq down to the north of the
\nArabian Gulf. They irrigate the arable lands in additio
\nc
\nproceeding to port approaches and falling down in the port area during the slack
\nwater
\nto access Iraqi port
\ncarriers from calling these ports and encouraged them to change the destination to
\nneighboring ports. Today, the situation is improving due to the efforts of the Iraqi
\nGovernment by investing in different project ( help with nursing paper writing from experts with MSN & DNP degrees)s. Many wrecks have been removed
\nfrom the channel and port areas as well as the rehabilitation of tender vessel for
\n63
\nmaintaining the channels and providing proper navigational aids. However, the long
\ndistance of ports approaches requires continuous dredging and channel maintenance,
\nwhich needs large amounts of money. In this respect, the need for making the
\nchannel shorter is also significant by constructing a deep-sea port in the north of the
\nrabian Gulf, which would be more accessible.
\ndways are generally
\nonnected with international highways crossing the borders with Kuwait, Jordan,
\nA<\/p>\n

5.3.2 Land Transport Network System
\nThe transport network system used at major ports comprises both rail and road for
\ncargo moved by ships. In general, rails are serving as passenger carriers and freight
\nservices in most countries. A single-track main line link operated by the Iraqi
\nRepublic Railways (IRR) is located within the transport corridor connecting the port
\nof Um Qasr with Al Basrah and other northern cities (IRR, 2009). The Iraqi railway
\nsystem is connected with other neighboring countries such as Syria and Turkey for
\ntransporting goods. The rail network does not function effectively at present due to
\nserious deterioration and damage to the tracks and rolling stock. However, many
\nattempts have been carried out by relevant authorities to enhance the network system
\nin order to get over the incompetence embarrassment and to cope with the increasing
\ndemand for proper transport services.
\nThe major ports are connected with the northwest of Al Basrah city and other
\npopulation centers all over the country by road links. The roa
\nc
\nSyria and Turkey. These roads are used to transport all types of cargo, utilizing
\nvarious types of privately operated trucks. During the recent reconnaissance surveys
\nmade by the JBIC (2006), it was reported that most of the road network linking the
\nports with the main network needs overlay and also a new layer due to the pavement
\nlayer being missing in the original design. The condition of the pavement layer of
\nthese roads is partially damaged, with many cracks evident on the road surface due to
\nrepetitive use and overloading. A road maintenance programme to repair the cracks
\nfollowed by overlay is taking place, but it would be insufficient to handle the
\n64
\nforecasted traffic increase, which means that new roads have to be constructed. As a
\nresult of the uncertainty of availability of trucks for several reasons, the transport of
\ngoods by trucks from major ports to all cities threatens the port productivity because
\nof the practice of direct delivery operations of goods. The commodities are mostly
\nfood imported by the Ministry of Commerce to be distributed to all provinces
\ng to a plan set by this Ministry. The plan compels trucking companies to
\nich is probably unsafe due to the security
\ns
\ne
\nAs the city of Basrah expanded in the 1960s, the need for building a new port to
\naccordin
\nmove the goods to a specific province, wh
\nituation. As a counteraction, the trucking companies refuse to carry these cargoes,
\nwhich would remain onboard ships or in port sheds. This situation is probably not
\npermanent because it depends upon the improvement of the current conditions,
\nwhich is hoped to be changed.
\nIn parallel to the need for access channel and berth rehabilitation and increasing their
\ncapacity, the hinterland transport network would become a bottleneck unless the
\ndevelopment of this sector is progressed and paid sufficient attention to decision
\nmakers in the country.
\n5.3.3 Ports Capacity and Performanc
\naccommodate larger ships with deep draught urged the decision makers to introduce
\nnew ports. Um Qasr Port was chosen to be the future commercial port in Iraq with a
\nmaximum capacity of 13.6 million tons per year (GCPI, 2010). The major Iraqi ports
\n(Um Qasr and Khor Al Zubair) are chosen to be assessed in order to present the
\ncurrent capacity and performance level.
\nThe majority of quayside cranes in the port of Um Qasr are over 20 years old and
\nmany, particularly at the south berths are not functioning properly. The total number
\nof cranes is 55 distributed as 38 rail mounted cranes at the north berths and 17 cranes
\nat the south berths. In general, the cranes are of the level luffing portal jib crane
\ndesign with capacities of 3 tons to 15 tons, although there are also 2 gantry cranes of
\n65
\n40 tons capacity for handling containers at berth 20 and 2 older gantry cranes at berth
\n5. The two gantry cranes at berth 20 are relatively new, supplied by ZPMC in 2001
\nand working efficiently, but there are break downs due to lack of spare parts. The
\nport is also equipped with two Liebher 100 ton mobile container cranes, which have
\nbeen installed and are now operational. The have almost doubled the port’s ship-toshore container capability (JBIC, 2006).
\nThere are 10 reach stackers operable with insufficient efficiency because four of
\nthem are more than 9 years old, the lack of original spare parts and the tropical
\nweather, which affects the function of the engines as well as other types of
\nequipment. Moreover, there is an insufficient number of trailers and container
\nrminal tractors to facilitate the transport of containers within the port. Similarly, the
\ntwo lever lifting cranes. The port does not have a specialized
\nontainer terminal nor container handling equipment.
\n0 ton\/hour. Nonetheless, the ports located
\nlong the Shat Al Arab are facing the challenge of shallow water in the river
\nte
\ncargo handling equipment in Khor Al Zubair Port can be described as quayside
\ncranes which are over 25 years old and a number of them are non functional. The
\nport has 17 rail mounted cranes with capacities of 5, 8 and 15 tons which are not
\nworking efficiently and
\nc
\nAs mentioned earlier, the port is designed for industrial purposes. Consequently, the
\nport has specialized bulk handling machines and equipment installed but none of
\nthem are currently working. There are 4 ship loaders for export of urea (fertilizer)
\nwith a capacity of 1500 ton\/hour, 2 ship unloading and one for the raw iron, one
\nstacker in raw iron stockyard of 300 ton\/hour capacity and one stacker of 600
\nton\/hour capacity with reclaimer of 150
\na
\nentrance, which limits the size of vessels that can call the ports. Thus, the ports have
\nlimited capacity and are used for importing goods and vegetables by RORO ships,
\ncontainer ships and small wooden dhows, which have shallower draughts.
\n66
\nIn general, Iraq is suffering from the lack of electrical power supplies due to the
\nabsence of electricity sector development during the last three decades and also
\nbecause of the increased demand for electricity due to population growth and
\neconomy. Consequently, the ports are also experiencing difficulties in availability of
\nelectricity provided by the national network. To enable the ports to operate, diesel
\ngenerators are needed because they depend on diesel generators, which are intended
\nr emergency use only. To such an extent, these emergency generators are
\ncilities to deal with vessels
\nisposals, such as garbage, sewage and oily bilge water as a requirement of the
\nduring the
\nst three wars that Iraq has faced since 1980, which has had an impact on port
\nperformance and capacity. These reasons have become a challenge for the
\nfo
\ninsufficient to operate all port equipment such as gantry cranes, and also it is more
\nexpensive compared with the main electricity due to the use of expensive fuel.
\nConsidering other port facilities, in previous years, the fresh water to the port stations
\nwas supplied through pipelines from the Al Maqal pumping station in the city of
\nBasrah, but this source is no longer available. Piped water, which is brackish and
\nunsuitable for drinking or washing, is supplied from local wells but even these run
\ndry after two hours of pumping. Fresh water is currently delivered to the ports and
\nvisiting ships by tankers for the consumption of port workers as well as ships.
\nCurrently, there are no developed port reception fa
\nd
\nimplementation of the IMO regulations such as MARPOL73\/78.
\nThe port performance and operational capability have to be analyzed in order to
\nunderstand the current level of operation, identifying the bottlenecks in the ports as
\nwell as the potential areas for development. In general, Iraqi ports are considered
\nfeeder ports receiving cargo mainly from Dubai ports for private shippers. Goods
\nimported by ministries like the Ministry of Commerce are moved directly from
\nproduction centers to Iraqi ports. The ports can be identified as second generation
\naccording to the UNCTAD classification of ports, which are used for cargo handling
\nand storage operations. Moreover, the ports have suffered from neglect
\nla
\n67
\ndevelopment of port productivity to be able to handle increasing traffic caused by the
\nrebuilding of the country and increased demand for goods.
\nConsidering the facts of the service time of cargo handling, the ports performance
\nindicates more than two days for loading and unloading a container vessel of 600
\nTEUs. Hence, the ship turnover time would be more than adequate and affordable for
\nshipping lines, which are usually concerned about the time consumed in ports.
\nFurther, a bulk carrier of 50,000 dwt might spend at least seven days for unloading
\nthe grain. Such low productivity resulted from the unavailability of sufficient cargo
\nhandling equipment in addition to the absence of modern operational techniques.
\nlthough it has been noted that some of the old pieces of equipment are workable,
\ne for data exchange
\nmong departments of the ports and with other authorities such as customs, and this
\nA
\nthey are in need of major maintenance or replacement. Even the equipment that is
\ncurrently working may have a limited life due to inadequate maintenance resulting
\nfrom unavailability of spares, particularly for the older equipment. Therefore, the
\nports have not reached the designed capacity, which gives a greater opportunity for
\nenhancement of current port productivity in terms of increasing the cargo handling
\ncapacity and accommodating more calling vessels.
\nObviously, time is an influential factor for port selection by shippers and carriers as
\ndiscussed earlier. The ports are mostly using bureaucratic routin
\na
\nroutine is considered as one of the ports’ bottlenecks. The application of electronic
\ndata interchange (EDI) in the transport network would Help the improvement of
\ncargo flows and satisfy the customers to some extent by eliminating red-tape
\nprocesses, which take plenty of time. In addition, the use of such new technology
\nreduces labor costs, which would lead to reducing the total transport cost.
\n5.3.4 The current security situation
\nIt is understood that the most significant problem affecting the country’s trade and
\nthe transport system to operate in a commercially viable manner is the lack of
\nsecurity due to the presence of terrorism, compounded by the foreign intervention on
\n68
\nthe decision making in Iraq. As mentioned before, this resulted in high freight rates
\nfor transporting goods to Iraq, which contributed to high prices of commodities to be
\nimportant sector to develop the
\nansport system. This dissertation assumed that the current security situation would
\nrocedures
\nave been implemented as anti-corruption tools to secure the government system,
\nd is time consuming. By trade facilitation, the
\npaid by the citizens. Such situation has a notable impact on the transport system,
\nparticularly in ports and on borders. For example, in the ports all containers have to
\nbe inspected to ensure that there are no explosive materials that can be used for
\nbombs and to prevent illegal smuggling. Even though this procedure is considered
\nrational for a country suffering from such conditions, the delay of cargo transiting the
\nport would lead to accumulating cargoes in the port’s yard, which reduces the
\npossibility of utilization of the ports.
\nIt is worth mentioning that there are great efforts and practical steps being made by
\nGCPI to apply the requirements of the International Ship and Port Security Code
\n(ISPS code) commencing from 2006. Donations have been made by several countries
\nto establish an advanced security operations center and train the security officers in
\nWorld Maritime University and Japan. The magnitude of the challenge facing the
\ncountry led to the extraordinary support for this
\ntr
\nimprove in the near future.
\n5.3.5 Red Tape Procedure and Corruption
\nAccording to Global Integrity Commons (2008), Iraq is one of the countries that is
\nsuffering serious challenges of corruption in most of its organizations and ministries.
\nThis is affecting the performance of all sectors including the transport network as a
\nbottleneck for public interest. Hence, many investors are scared away from investing
\nin different fields as mentioned earlier. As a result, complicated red tape p
\nh
\nwhich has led to more obstructions an
\ntransport sector will be improved through introducing advanced EDI systems for
\noperations control, automated payment and electronic documents taking the expertise
\nof developed countries. Further, replacing the bureaucratic procedure by a
\n69
\ncomputerized system contributes to providing a market oriented system and creates a
\nhigh level of customer satisfaction and also by using a single window experience for
\ntrade (Hoffmann, 2010). Therefore, extraordinary effort has to be stretched in order
\nto introduce preventive anti-corruption procedures to Help the smooth flow of
\ngoods.
\n5.4 Increasing Demand for Transport
\nEssentially, oil is a major contributing factor to Iraq’s GDP, influencing the economic
\ngrowth and the country’s development. It is reported that crude oil exports had
\nchieved 3.5 million barrels per day in 1979, which was the highest level ever
\n, the country’s economy would affirm a quantum leap
\nading to over press the transport system in order to move all the country’s
\nan needs when the personal income
\na
\nreached (Kumins, 2006). Currently, the country is exporting about 1.82 million
\nbarrels a day due to the destruction of oil fields resulting from successive wars and
\nthe long embargo (IOM, 2010). Therefore, this sector has suffered from lack of
\nadvanced technology and investments.
\nThe Iraqi Government has contracted big companies like BP, Shell, Chevron and
\nTotal to increase the capacity of production to 4.5 million barrels per day within the
\nnext 5 years. Consequently
\nle
\nrebuilding materials, household and other hum
\nwould increase. Moreover, the equipment and machinery that will be needed for
\ndeveloping the oil fields under the mentioned contracts increase the demand for
\nsophisticated transport systems that could provide reliable services.
\nMost of the fields that are contracted to help boost the output of crude oil are located
\nin the southern part of the country nearby the port areas, which would definitely
\nincrease the traffic and cargo transiting through the Iraqi ports. Further, the oil export
\noperations would mainly be taking place through the oil terminals in the Gulf
\nfocusing on evolvement of pipeline systems. The demand for carriage of goods by
\nmore than one mode of transport may lead to introducing the MT system in Iraq.
\n70
\nWithout a proper national port system, future expansion of the commercial relations
\nwill be restrained by the existing port capacity or will be using facilities in other
\ncountries. However, transshipment via other ports is not a suitable measure since it
\ncan only increase delivery time and costs (C.I.I.T.I, 2008).
\nTable 5.4 Iraq’s GDP Growth Estimates
\nil GDP GDP Oil GDP Non-oil
\n116,223 7.3 2.2 11.0
\n127,845 6.6 1.6 10.0
\n2018 219,794 80,443 139,351 5.9 1.0 9.0
\n2019 231,956 80,900 151,057 5.5 0.6 8.4
\nYear US$ 2006) (Million US$
\n2006)
\n(Million US$
\n2006)
\ngrowth
\n(%) growth (%) growth
\n(%)
\n2007 65,270 40,913 24,358 26.5 22.0 35.0
\n2008 79,898 47,868 32,031 22.4 17.0 31.5
\n2009 95,090 54,090 40,999 19.0 13.0 28.0
\n2010 110,543 59,499 51,044 16.3 10.0 24.5
\n2011 126,023 64,259 61,763 14.0 8.0 21.0
\n2012 140,687 68,115 72,572 11.6 6.0 17.5
\n2013 154,252 71,521 82,732 9.6 5.0 14.0
\n2014 167,898 74,411 93,487 8.8 4.0 13.0
\n2015 181,365 76,659 104,705 8.0 3.0 12.0
\n2016 194,593 78,371
\n2017 207,459 79,614
\nOil GDP Non-o GDP (Million
\n2020 243,861 81,022 162,839 5.1 0.2 7.8
\nSource: C.I.I.T.I (2006).
\nTable 5.4 presents the GDP growth estimation for Iraq by explaining the division of
\ncrude oil and non oil activities contribution. The relationship between transport flows
\nand economic aggregates supported by GDP growth can contribute to mutual
\nbenefits due to the high correlation of generating an attraction for transport clients.
\nFurther, the relationship between transport flows and socio-economic variables
\ncreate attraction for passengers and freights. In most situations, the local passenger
\ntransport is contingent on the national income per capita and the technological
\ndevelopment in the economy along with institutional structure and stability.
\nThe international movement of passengers very likely depends upon the business
\nareas for investors and attractive locations for tourism. Table 5.5 shows the
\nforecasted growth of domestic transport among Iraqi cities. This estimation of
\n71
\npassengers flows are based on the normal conditions of the country, which can be
\ndebatable due to uncertainty of the stability of the country.
\nTable 5.5 Estimated Total Passenger Flows at Governorate level (Number of
\nassengers per day)<\/p>\n

1,616,380 2,203,447 2,806,693 3,424,763 4,063,676 4,730,481 5,011,992
\np
\nGvt 2007 2013 2018 2023 2028 2033 2038 2040
\nDuhok 22,583 35,427 48,295 61,517 75,063 89,067 103,682 109,852
\nNinewa 116,761 183,173 249,701 318,062 388,104 460,507 536,071 567,973
\nSulaimaniya 39,995 62,744 85,532 108,948 132,940 157,741 183,625 194,552
\nTa’meen 50,031 78,487 106,994 136,286 166,298 197,322 229,700 243,369
\nArbil 39,342 61,719 84,135 107,169 130,769 155,165 180,626 191,375
\nDiala 49,529 77,699 105,920 134,918 164,628 195,341 227,394 240,926
\nAnbar 53,091 83,289 113,539 144,623 176,471 209,393 243,752 258,258
\nBaghdad 260,022 407,917 556,072 708,309 864,288 1,025,527 1,193,805 1,264,849
\nBabil 42,974 67,417 91,903 117,063 142,842 169,490 197,302 209,043
\nKarbala 34,086 53,474 72,896 92,852 113,300 134,437 156,496 165,809
\nWasit 43,590 68,384 93,220 118,742 144,890 171,920 200,131 212,041
\nSalah Al Dieen 52,912 83,007 113,155 144,134 175,874 208,684 242,927 257,384
\nNajaf 37,519 58,858 80,236 102,202 124,708 147,974 172,254 182,505
\nQadisiya 37,846 59,373 80,937 103,095 125,798 149,266 173,759 184,100
\nMuthanna 27,409 42,999 58,615 74,663 91,105 108,101 125,839 133,328
\nDhi Qar 41,445 65,018 88,633 112,898 137,760 163,460 190,281 201,605
\nMaysan 30,713 48,183 65,683 83,665 102,089 121,134 141,011 149,403
\nBasrah 50,494 79,213 107,984 137,547 167,836 199,147 231,825 245,621
\nTotal attraction 1,030,342
\nYearly average
\ngrowth rates 7.79 6.39 4.96 4.06 3.48 3.09 1.16
\nSource: C.I.I.T.I (2006).
\nIraq’s cultural endowment and cultural heritage can have a considerable impact on
\nthe cultural tourism that may attract tourists to explore the historical inheritance
\nstretching back thousands of years. On the other hand, the presence of many holy
\nplaces may attract the religious tourism as distinctive poles of attraction. The
\npotential of passenger transport growth is shown in Table 5.6.
\nThe World Tourism Organization WTO (2003) forecasted that the inbound rate of
\nmight reach 3.25 million of passengers traveling from Iraq per year in 2015.
\npassenger growth for the period 1995-2020 would be 7.1% per annum and for the
\nperiod of 2010-2020, the annual growth estimated was 6.7% per year. The outbound
\npassenger transport forecasted to be 50% of the inbound rate of transport, which
\n72
\nRegardless of the accuracy of the percentage of the inbound and outbound rate of
\ngrowth as well as the domestic transport rate, the current transport system is
\nsufficient to be costumer focused services to mobilize the increasing demand for
\nTable 5.6 Distribution of forecasted inbound passenger flows in 2015
\nTotal Religious Tourism Business
\nin
\npassenger transport.
\nMacro
\nArea
\nNo. % No. % No. % No. %
\nMiddle
\nEast &
\nNorth
\nAfrica
\n929,340 14.3 47,938 5.0 454,017 15.9 426,485 15.9
\nEurope 2,134,610 32.8 – 0.0 1,101,734 38.5 1,032,876 38.5
\nRest of
\nAfrica
\n34,980 0.5 – 0.0 18,054 0.6 16,926 0.6
\nAmerica 564,202 8.7 – 0.0 291,201 10.2 273,001 10.2
\nIran 1,027,657 15.8 910,813 95.0 60,307 2.1 56,538 2.1
\nAsia &
\nPacific
\n1,809,211 27.8 – 0.0 933,786 32.6 875,424 32.6
\nTotal 6,500,000 100.0 958,750 100 2,860,000 100 2,681,250 100
\nSource: C.I.I.T.I (2006).
\nObviously, the outcome of the improvement of the country’s economy would affect
\noods and crude oil within 30 years.
\nthe freight transport sector. Such development increases the import and export of
\ngoods due to the recovery of financial ability of the citizens, increasing the
\npurchasing power of consumer goods. Therefore, it is expected that the export of
\ngoods and crude oil would intensify in the forthcoming years if the security situation
\nimproves as shown in Table 5.7, which shows the estimated growth for export of
\ng
\n73
\nTable 5.7 Estimated Growth of cargo export from Iraq to different regions (ton\/year)
\nYear Middle
\nEast, Iran,
\nLibya an
\nRest of
\nAfrica
\nEurope Rest of
\nAsia
\nAmerica Total
\nd
\nEgypt
\n2004 1,470,375 550,052 2,872,862 4,549,253 6,376,692 15,819,234
\n2010 835,556 675,035 3,248,989 4,966,307 7,024,750 16,750,636
\n20 8,627 32,883 5,91 ,022,482 41 15 63 8 3,886,109 7,840 8 19,297,9
\n2020 474,243 969,712 4,465,431 6,773,772 8,930,113 21,613,270
\n2025 545,38 1,116,815 5,222,140 7,801,204 31,58 ,717 1 10,0 3 24 ,123
\n2 7,559 1,301,521 6,222,775 9,075,384 11,771,219 29,008,458 030 63
\n20 8,501 1,503,060 7,331,456 10,467,787 13,674,428 33,715,231 35 73
\nSource: .T.I
\nThe forecast of imports and exports shown in tables 5.7 and 5.8 was very optimistic,
\nwhich can be inferred from the performance of the total volume of cargo imported
\nand exported to Iraq during the last five y w s a r
\nMoreover, the downturn of markets gen due glo inancial crisis was
\nunexpected and not taken into consideration when anticipating the import and export
\nvo on prop infra ctu T tie e
\ntrans sys u d of t th hey lize
\ncou c e e.
\nDes nc u v t at ie
\nher natural resources, the security instability has scared away
\nC.I.I (2006).
\nears, hich show only slight inc ease.
\nin eral to the bal f
\nlume. The introducti of a er stru re and M facili s into th Iraqi
\nport tem is an rgent emand in view the fac at t symbo the
\nntry’s ba kbone in th futur
\npite co erns over contin ed invol emen of foreign priv e compan s in
\ndeveloping oil and ot
\nmost foreign investors from participating in developing the country and bringing in
\nnew technology for other sectors such as transport. The oil fields are mostly far away
\nfrom the cities in the desert, and there is not much interaction between inhabitants
\nand investors, which are secure from danger. Further, the oil market is considered as
\nbeneficent for investors due to the high and consistent demand for oil generating
\nmore profit.
\n74
\nTable 5.8 Estimated growth of cargo import to Iraq from different regions (ton\/year)
\nY le
\nt
\near Midd
\nEast, Iran,
\nLibya and
\nEgyp
\nRest of
\nAfrica
\nEurope Rest of
\nAsia
\nAmerica Total
\n2004 9,008 1,184 3,032 2,403 496 16,123
\n2010 322 1,633m 441,133 692,897 690,924 164,530 3,622,806
\n2015 2,813,189 4 1,012,26 1,368,092 1,481,690 340,103 7,015,339
\n2020 4,721,169 5 2,079,88 2,570,132 2,928,184 637,103 12,936,473
\n2025 7,604,300 3,467,258 4,228,388 4,890,323 967,041 21,166,310
\n2030 ,717 11,294 5,321,692 6,417,125 7,516,918 1,383,805 31,934,257
\n2035 ,388 15,614 7,595,765 9,067,924 10,742,043 1,831,793 44,851,863
\nSource: C.I.I.T.I (2006).
\nThe transport sector is a service based activity directly connected to the daily life of
\nits costumers. Therefore, the investors ought to be engaged in developing the
\ntransport sector implementing the advanced technology for operating an efficient
\ntransport system by direct control. The biggest foreign investors in the transport
\nsector are aware of this fact of uncertain and unsecured business, which has impeded
\nthem from being highly involved. The continued process of normalizing the county
\nmay provide extensive means of persuasion to investors in order to promote their
\nparticipation in the development process and introducing new efficient MT systems
\nthe country and probably expanded to cover the entire region.
\nition, the preoccupation about the county’s security and the stability of
\ne current situation take precedence for the decision makers over all sectors, which
\nin
\nSimilarly, the growth of the economy in the country would lead to increasing the
\nGDP. Consequently, the GDP growth per capita will increase leading to raising the
\ndemand for importing more cargo. Therefore, the expected growth for trade is
\ninterrelated with import growth as shown in Table 5.8.
\nAgain, it can be said that the estimate was very optimistic for the reasons mentioned
\nbefore. In add
\nth
\n75
\nhas led to delayed development of the infrastructure of the country, and this in turn
\naffected the on ity i in
\nimported ca
\nThe location of Iraq in a highly populated region might play a notable role in
\ncs and globa . The bor co ht attr lobal pr to
\nish reg c dis cen anufactured goods, which
\nbly w la ap ed nufactured goods in the
\ny of o o r lv l t an
\nund re d vi e T , li
\nope, to f al f d
\nprovisi
\nrgo.
\nof additional capac to accommodate the ncrease
\nlogisti trade lization low la st mig act g oducers
\nestabl ional produ tion and tribution ters for m
\nproba ould be re tively che er compar with ma
\ncountr rigin due t the transpo t cost invo ement, low abor cos d low cost
\nof gro nt. Such in ustrial acti ties requir a reliable M network ke the one
\nin Eur serve the movement o raw materi s as well as inished pro uction.
\n76
\nChapter 6
\nConclusions and Recommendations
\n6.1 Conclusions
\nic.
\noreover, the connectivity between different modes and nodes of transport
\nsupplement the backbone for a number of developed countries like the US, the EU
\ncountries and Japan. The removal of constraints for the evolvement of transport
\nsystems enabled these countries to best utilize the available resources and implement
\nthe latest transport technology. Consider
\nmore desirable compared with air, rail and road transport, but the efficiency and
\nreliability of other modes of transport for the mentioned countries have given
\ncompetitive advantages to be prosperous in different regions.
\nThe multimodal transport concept has e the setting up of door-to-door
\ntransport of goods by combining different means of transport. This dissertation has
\nbeen analyzing the combination of sea transport with rail and road transport as an
\nalternative multimodal transport system f r the Suez Canal route. Several criteria
\nhave been used to assess the competitiveness of such multimodal transport system
\nsince it is possible to be a rival for maritime transport. Regarding the distance
\ncomparison, the new route has the advantage of being shorter than the Suez Canal
\nroute in the case of European trade with Asian countries and Arabian Gulf countries.
\nHowever, the time of transporting goods would be longer due to the cargo handling
\noperations in two ports for loading and unloading. Further, crossing the borders may
\nreate delays due to documentation processes and customs clearance. The savings in
\nThis dissertation attempted to analyze the possibility of introducing a new corridor in
\norder to adduce more options for the competitive shipping market. Basically, it has to
\ntake into account several factors other than the transport bottlenecks that have a
\nsignificant impact on trade direction. The transport cost, time of transport, the
\nreliability of the mode of transport and the service level are the most decisive factors
\ninfluencing the selection of routes by carriers and shippers. However, the market
\nconcentration and the demand for transport also contribute to attracting more traff
\nM
\ning transport costs only, sea transport is
\nbecom
\no
\nc
\n77
\ndistance is not significant compared sport costs because the distance of
\nthe new route represen st the cost is 179% for
\ntransporting one TEU from Shanghai to Rotterdam.
\nsent Iraqi and Syrian
\nansport systems would be a relevant bottleneck for cargo transshipment for
\nwith the tran
\nts 96.5% of the Suez Canal route, whil
\nDue to the economic crisis, most shipping lines are applying slow steaming to
\nminimize the operating costs by reducing the fuel consumption and deploying more
\nvessels since the demand was decreased. Therefore, the time factor for cargo delivery
\nmight be flexible in a number of cases and for some types of commodities. Thus, the
\ncost of transport is the most influential factor for the competitiveness between the
\ntwo routes. The determination of transport cost per unit proved that the existing route
\nis the most desirable one in terms of cost effectiveness and time saving. The high
\ncost of the proposed integrated transport system resulting from the current
\nincompetence and old transport network caused a higher set of prices.
\nSea transport is getting benefits from the size of vessels, which has a direct impact on
\ntransport cost per unit due to the economies of scale. Hence, the suggested corridor
\ndoes not have the ability to be the exclusive alternative for cargo transit unless a
\nreliable multimodal transport system is developed in order to be cost effective like
\nthe MT systems in developed countries. Actually, the pre
\ntr
\nhinterland connections. Because of the higher transport costs, the new multimodal
\ntransport is deemed to be unqualified to compete with full maritime routes
\ncircumnavigating Africa or using the Suez Canal. Considering a unique base
\ncondition can be misleading because of the particular situation. The transport system
\ncan be renewed or reconstructed since the budgetary allocation is available to invest
\nin such a modern network. The regional countries should make strong modifications
\nof the transport system. However, with high transport cost and low costumer service
\nlevel it is hard to convince the carriers and shippers to use the suggested route.
\n78
\nThe existing route has a limitation for the number of vessels that can transit through
\nthe Suez Canal as convoys. This may be used as an opportunity for developing a
\nregional transport system between Iraq and Syria from one side and Iraq with Turkey
\nn the other side if the traffic is increasing and market starts booming again. The
\nas temporary
\nonditions, which make the comparison difficult in terms of security for both routes.
\nment.
\nurther, applying strict rules and regulations can Help in reducing GHG emissions
\nfrom ships, but it can affect the competition level between the two routes. Another
\no
\nmarket share of the new route can be increased by sufficient regional cooperation and
\ninvesting huge amounts of money to rebuild the connected transport network and
\nreducing bureaucratic routine. Pirate attacks on ships transiting the Suez Canal are
\nanother challenge to the traffic, which is an opportunity for the new corridor to
\nincrease its market share.
\nObviously, the current situation in Iraq is also threatened by terrorism attacks, which
\nhave led to instability of the region’s security, but it can be said that the situation will
\nprobably improve. Likewise, the pirate attacks can be considered
\nc
\nNevertheless, the Suez Canal has been closed twice for security and political reasons,
\nwhich enraged the shipping companies since they had to cover longer distances.
\nHowever, Iraq has suffered three wars within 30 years, which affected the entire
\ntransport system, particularly the sea transport and port approaches. Again the
\nsecurity situation for both options is unpredictable and can be aggravated anytime
\ndue to piracy and political instability of the region. Relatively, the existing route is
\nmore desirable despite the high insurance and the ransoms to be paid for pirates as
\nwell as the danger to the lives of seafarers.
\nAn assessment of the environmental impact and gas emissions has been carried out in
\nthis dissertation by calculating the CO2 emission from ships, rails and trucks. The
\noutcome of these calculations demonstrated the preference of using the existing route
\nin terms of CO2 emissions, but the new route has a potential to perform greener
\ntransport services through modernizing rails, trucks and cargo handling equip
\nF
\n79
\ntechnique would be possible to protect the environment by using a green pricing
\nsystem and giving incentives to shipping companies if they make an effort to reduce
\nGHG emissions. Iraqi ports and Syrian ports can provide ships with purified bunker
\nto reduce the GHG emissions and also offer port reception facilities in order to be
\nattractive for shipping lines by reducing their costs and being environmentally
\nfriendly.
\nThe competitiveness credibility of the new routes can be given to crude oil transport
\nby pipelines from the Gulf countries to Europe and the US. This dissertation has
\nund that exporting crude oil through a dedicated oil terminal in the Mediterranean
\nity of ports, which created bottlenecks for
\nooth flows of cargo. As a matter of fact, this dissertation has highlighted, among
\nfo
\ncan potentially interest oil exporters in the region. The time saving, cost effectiveness
\nand environmental friendliness of a new transport system via Syria would solve
\npiracy problems for oil tankers and reduce the total transport cost.
\nAt present, the growth of Iraq’s GDP and economy due to the contribution of a
\ngradual increase of crude oil exports caused the urgent need to improve all areas
\nrelated to services. Special attention ought to be given to transport systems to serve
\nthe movement of raw materials needed for such development and to provide
\nsignificant logistics as part of the total supply chain. The demand for transport and
\nship calls have been increasing in the previous five years and also cargo volumes
\nhave increased. However, the transport network is insufficient to cope with such
\nincreasing demand due to the limited capac
\nsm
\nthe areas for which a more thorough analysis was needed, both a study of a new
\nconfiguration of the multimodal transport system as a consequence of the
\nintroduction of a new deep sea port and for international connections.
\nThe establishment of a new deep-sea port connected with efficient hinterland
\nconnections requires a reorganized multimodal transport system with specific
\nobjectives for better function of the country. A continuous sediment problem
\n80
\naffecting the depth of ports and their approaches is requiring a continuous
\nmaintenance dredging in order to sustain appropriate depth for safe ships’ sailing.
\nThe maintenance dredging requires an allocation and disbursement of huge amounts
\nof money leading to increasing the port tariffs and entire transport cost. The
\nconstruction of a new deep- sea port implies rail and road connections with the
\ndomestic network. This network can be linked to regional transport systems in order
\ngain mutual benefits for all countries participating in the project ( help with nursing paper writing from experts with MSN & DNP degrees). European
\nment of goods to
\nurkey, Syria, Lebanon and Jordan from Asian countries is price effective through
\nl route will be
\nffected and the carriers may be convinced to redirect their routes.
\nto
\ncountries and the American countries are trade partners to Iraq because most of the
\ncrude oil is exported to these countries and a big part of the imported materials and
\ngoods come from them. However, the transport costs make up a considerable part of
\nthe total cost of goods due to lack of efficiency in the transport system. In spite of
\nthat, transporting goods from Europe and the US to Iraq via Syria and Turkey is
\ncheaper compared with using the Suez Canal route. Similarly, ship
\nT
\nthe suggested route. The cost comparison illustrated that the new route is more
\nexpensive for international flow of goods than the Suez Canal whereas it is cheaper
\nfor goods transport to remain in the Middle East.
\nAs a result of the critical analysis undertaken by the author, the development of the
\nregional transport system can be initiated with reasonable capacity to serve the
\nmovement of goods within the region since the economy is growing. Further, the
\nfinal destinations for goods imported and exported have not changed for shippers and
\ncarriers. Therefore, the new integrated transport system would improve the service
\nlevel to satisfy the clients and reduce the costs, which would attract more traffic.
\nOnce the suggested transport system has illustrated its reliability and cost
\neffectiveness in the region, the competition level with the Suez Cana
\na
\nObviously, more choices for shipping lines will eliminate the monopolistic status of
\nthe Suez Canal to have exclusive control on the price of transit through the Canal. In
\n81
\nthe long term, the competition between the two routes may lead to transport cost
\nreduction and provide an alternative in case of the Canal closure. The success of the
\nnew route depends on its ability to provide certain services to a high standard with
\nsmooth process of formalities and high efficiency.
\n6.2 Recommendations
\n\u2022 Since the current transport system has not reached its designed capacity, special
\nattention should be paid to enhancing the capability of the present network in
\norder to accommodate increasing traffic as medium term planning. This will
\nimprove the overall system of transport as well as the country’s economy and
\nsocial benefits. Without having developed an internal network of transport, the
\nintroduction of a new MT system as an alternative for the existing Suez Canal
\nroute will be impossible.
\n\u2022 The arrangement of regional cooperation is required to be investigated before
\ninvesting in this regional multimodal transport system in addition to the
\ncooperation between governmental authorities involved. A legal framework has
\nto be agreed upon in order to facilitate cargo transit through different countries.
\ncountries. Further, the risk analysis system at the borders can be applied by
\nMoreover, decisions need to be taken regarding the investment contributions by
\nthe regional countries. Private sector involvement would lead to improvement of
\nthe commercial outcomes of the new route similar to those existing in the US and
\nEurope.
\n\u2022 The pricing system for transport by railway and roads needs to be reassessed for
\ntransited cargo and port tariffs can be reduced in order to attract more traffic.
\nHowever, there is a need for an agreement between the regional countries about
\nfree customs dues for transited cargo similar to the system that applies in the EU
\nCustoms instead of inspecting all containers and trucks.
\n82
\n\u2022 A special initiative for oil transport is required by Iraq and Syria to build a
\npipeline from the oil fields to the Mediterranean in order to encourage oil tankers
\nto change their routes. This will contribute towards transport cost reduction and
\nwill be profitable for both countries.
\n\u2022 A practical cost determination and analysis of other transport factors can be
\ntransport infrastructure. Passenger transport may also
\nbe evaluated by similar methodology because of the special feature of
\n\u2022<\/p>\n

performed by the Iraqi and Syrian authorities concerned since there is a railway
\nconnection between the two countries similar to the attempt that was carried out
\nby TSR between Duisburg in Germany and Moscow. By doing so, the exact
\nsituation will be clearly addressed and real figures of transport cost will be
\nprovided, which is the main concern for carriers and shippers. Likewise, it can be
\ndone for the transport connection with Turkey to evaluate the feasibility of
\ninvesting in a multimodal
\ntransporting people, who are mostly concerned about the service level, time and
\ntransport cost.
\nDue to unavailability of sufficient data related to the transport system and
\ntransport cost in Syria, further research is recommended for estimating the real
\ntransport cost in order to present comprehensive data for the new route users as
\nwell as the decision makers in both countries.<\/p>\n

83
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